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BOOKS  RELATING  TO  CORPORATIONS 


CONYNGTON  ON  CORPORATE  ORGANIZATION 
352pp.,  1905,  Prepaid,  Buckram  $2.70;  Sheep  $3.20 

Forms,  directions  and  information  relating  to  the 
organization  of  corporations.  Important  points  sus- 
tained by  citations.  In  general  use  among  attorneys. 


CONYNGTON  ON  CORPORATE  MANAGEMENT 
352pp.,  1904,  Prepaid,  Buckram  $2.70;  Sheep  $3.20 

A  handy  work  of  reference  for  the  use  of  lawyers  and 
corporation  officials,  containing  forms,  procedure  and 
practical  directions  for  the  mangement  of  corporations. 
The  standard  work  of  its  kind.  Moie  generally  used 
than  any  other  work  on  corporations.  Second  Edition. 

Both  the  above  books,  Prepaid,  Buckram  $5.25; 
Sheep  $6.25 


OVERLAND'S  CLASSIFIED  CORPORATION  LAWS 
458pp-,  19061  Prepaid,  Buckram  $3.00;  Sheep  $3.50 

A  well-arranged  statement  of  the  business  corporation 
laws  of  every  state  and  territory  of  the  Union.  Classi- 
fied according  to  subject.  Contains  amendments  up  to 
Dec.  ist,  1905.  Clear,  comprehensive  and  convenient. 

Published  annually. 


HARRISON'S  NEW  YORK   CORPORATIONS 

43ipp.,  1906,  Prepaid,  Buckram  Binding  $3.50 

A  book  for  New  York  corporations,  giving  procedure, 
forms  and  statutes.  Well-arranged,  accurate  and  ex- 
ceptionally convenient  for  ready  reference. 

THE  RONALD  PRESS  COMPANY 
229  Broadway,  New  York 


A  MANUAL 


OF 


NEW  YORK  CORPORATION  LAW 

CONTAINING 

The  Important  Statutes  Regulating  Business  Incor- 
porations, a  Digest  of  these  Statutes  and  the 
Principal  Forms  Used  by  Corporations 
Operating  in  the  State  of 
New  York 


BY 

RICHARD   COMPTON    HARRISON 

•  I  / 

OF   THE    NEW  YORK   BAR 


NEW  YORK 

THE  RONALD   PRESS 

1906 


COPYRIGHT   1906 

BY 
THE  RONALD  PRESS  COMPANY 


PREFACE. 


The  purpose  of  this  work  is  to  furnish  in  compact  and 
convenient  form  the  usual  law  and  procedure  governing  busi- 
ness corporations  in  the  State  of  New  York.  The  statutes 
of  this  state  regulating  corporations  are  a  gradual  growth 
and  as  a  result  are  often  disconnected  and  complex.  They 
are  also  modified  by  the  decisions  of  the  courts  and  the 
interpretations  of  state  officials  and  are  supplemented  by  the 
rules  of  the  common  law.  Hence,  in  order  to  determine  what 
the  law  governing  corporations  really  is,  a  digest  of  the  whole 
is  necessary.  If  this  can  be  done  in  an  orderly,  lucid  arrange- 
ment, as  has  been  attempted  in  this  work,  it  should  be  helpful 
to  all  who  are  interested  in  corporations. 

The  present  volume  includes  a  digest  of  the  entire  law 
governing  business  corporations  in  New  York  as  contained 
in  the  statutes  and  decisions  of  the  courts,  the  forms  most 
frequently  used  in  corporate  procedure,  and  a  reprint  of  the 
statutory  law  as  amended  to  date.  It  is  intended  to  supply 
a  concise  manual  of  corporate  organization  and  management 
for  the  State  of  New  York. 

In  the  preparation  of  the  work  an  attempt  has  been  made 
to  present  the  law  of  corporations  in  clear,  logical  and  con- 
venient form.  The  latest  and  most  authoritative  cases  and 
citations  have  been  selected,  and  the  forms  presented  are  of 
approved  excellence.  The  statutes  include  all  the  important 
enactments  which  bear  on  the  usual  corporate  practice. 

The  forms  given  are  presented  as  precedents  and  without 
the  usual  and  sometimes  very  puzzling  omissions  where  varia- 
ble matter  occurs.  This  variable  matter  is  indicated  in  some 

iii 


IV  PREFACE. 

of  the  forms,  as  for  instance  the  state  and  local  reports  re- 
quired of  New  York  corporations,  by  its  different  type  face, 
but  in  the  majority  of  cases  the  forms  are  merely  copies  of 
fully  completed  instruments.  It  is  believed  that  this  gives  a 
better  idea  of  the  form  as  a  whole  and  that  the  changes 
necessary  to  adapt  it  to  any  particular  need  are  more  easily 
made  from  the  completed  instrument  than  from  one  disjointed, 
and  sometimes  unintelligible,  because  of  omitted  matter. 

Most  of  the  forms  presented  have  been  obtained  through 
the  courtesy  of  Mr.  Thomas  Conyngton,  many  not  directly 
supplied,  having  been  taken  or  adapted  from  Mr.  Conyngton's 
very  admirable  works,  "  Corporate  Organization  "  and  "  Cor- 
porate Management."  To  him  and  to  numerous  friends  the 
author  takes  this  opportunity  of  expressing  his  thanks  for 
many  helpful  suggestions  and  criticisms. 

RICHARD  C.  HARRISON. 
NEW  YORK, 

March  ist,  1906. 


TABLE  OF  CONTENTS. 


PART  I.— PROCEDURE. 

Chapter  I.     Corporation  Laws. 

§     i.  Creation  of  Corporations. 

2.  Constitutional   Provisions. 

3.  Statutes. 

4.  The   Business  Corporations  Law. 

5.  The  Stock  Corporation  Law. 

6.  The  General  Corporation  Law. 

7.  Relative  Force  of  General  and  Special  Statutes. 

8.  General   Statutory  Law. 

9.  Common  Law. 

Chapter  II.     Expenses  of  Incorporation. 

§  10.  Organization    Expenses. 

11.  Organization  Tax. 

12.  Fees  to  Secretary  of  State. 

13.  Fees  to  County  Clerk. 

14.  Table  of  Organization   Expenses. 

Chapter  III.     Certificate   of  Incorporation. 

§  15.  Incorporators. 

16.  Certificate  of  Incorporation. 

17.  Contents  of  Certificate  of  Incorporation. 

18.  (i)  Name. 

19.  (2)  Corporate  Purposes. 

20.  (3)  Capital  Stock. 

21.  (4)  Shares.     Initial  Capital. 

22.  (5)  Location. 

23.  (6)  Duration. 

24.  (7)  Number  of  Directors. 
(8)  Names. 


VI  TABLE  OF  CONTENTS. 

25.  (9)     Subscribers. 

26.  (10)     Special  Provisions. 

27.  Execution  of  Certificate. 

28.  Filing  and  Recording.     State. 

29.  "  Local. 

30.  Allowance. 

Chapter  IV.     By- Laws. 

§  31.  Preparation. 

32.  (i)     Meetings  and  Elections. 

33.  (2)     Directors. 

34.  (3)     Officers. 

35.  (4)     Capital   Stock. 

36.  Adoption. 

37.  General. 

38.  Observance. 

39.  Repeal. 

Chapter  V.     First  Meetings. 

§  40.  First  Meeting  of  Stockholders. 

41.  Notice  of  Stockholders'  Meeting. 

42.  Minutes  of  Stockholders'  Meeting. 

43-  Organization  of  Stockholders'  Meeting. 

44.  Acceptance  of  Charter. 

45.  By-Laws.     Stockholders'. 

46.  Exchange  of  Stock  for  Property.     Stockholders'  Action. 

47.  Other  Business.     Stockholders'  Meeting. 

48.  First  Meeting  of  Directors. 

49.  Organization  of  Directors'  Meeting. 

50.  Issue  of  Stock  for  Property. 

51.  Miscellaneous  Business.     Directors'  Meeting. 

Chapter  VI.     Corporate  Existence. 

§  52.  When  Commenced. 

53.  Beginning   Business. 

54.  Renewal. 

55.  Forfeiture  of  Charter. 

56.  Dissolution. 

Chapter  VII.    Corporate  Powers. 

§  57.  General. 

58.  (i)     To  Have  Succession. 

59.  (2)     To  Appoint  Officers  and  Agents. 


TABLE  OF  CONTENTS.  vii 

60.  (3)     To  Make  By-Laws. 

61.  (4)     To  Have  a  Seal. 

62.  (5)     To  Acquire,  Hold  and  Dispose  of  Property. 

63.  Power  to  Hold  Property  in  Other  States. 

64.  Power  to  Hold  Its  Own  Stock. 

65.  Power  to  Hold  Stock  of  Other  Corporations. 

66.  Status  of  Holding  Corporations. 

67.  Power  to  Borrow  Money.     Corporate  Bonds.     Mortgages. 

68.  Power  to  Guarantee  Debts  of  Other  Corporations. 

69.  Power  to  Do  Business  in  Other  States. 

70.  Consolidation  of  Corporations. 

71.  Merger. 

72.  Amendment  of  the  Charter. 

(a)  To  Secure  New  Purposes  of  Same  General  Character. 

(b)  Increase  of  Capital  Stock. 

(c)  Decrease  of  Capital  Stock. 

(d)  Increase  or  Decrease  of  Number  of  Shares. 

(e)  Change  of  Number  of  Directors. 

(f)  Change  of  Location  of  Principal  Office. 

(g)  Classification  of  Stock. 

(h)     Extension  of  Corporate  Existence. 
(i)     Change  of  Corporate  Name. 

73.  Ultra  Vires  Acts. 

Chapter  VIII.    Capital  Stock. 

§  74.  Capital   Stock.     Statutory  Requirements  as  to  Payment. 

75.  Amount  of  Capitalization. 

76.  Classes  of  Stock.     Common  and  Preferred. 

77.  Classification  of  Stock.     After  Organization. 

78.  Redemption  of  Preferred  Stock. 

79.  Other  Classifications. 

80.  Par  Value  of  Shares. 

81.  Subscriptions. 

82.  Stock  Certificates. 

83.  Lost  and  Destroyed  Certificates. 

84.  Consideration  for  Issue. 

85.  Calls  for  Subscription  Installments. 

86.  Increase  or  Decrease. 

87.  Transfer  of  Stock. 

88.  Dividends. 

Chapter  IX.    Stockholders. 

§  89.  Creation  of  the  Relation. 

90.  Rights  of  Stockholders.     Collective. 


Vlll  TABLE  OF  CONTENTS. 

(a)  Mortgages. 

(b)  Conversion  of  Obligations  into  Stock. 

(c)  Sale  of  Property  and  Franchise. 

(d)  To  Guarantee  Stock. 

(e)  Consolidation. 

(f)  Renewal. 

91.  Rights  of  Stockholders.     Individual. 

(a)  Right  to  Notice;  Voting. 

(b)  Dividends. 

(c)  Stock  Certificates. 

(d)  Transfer  of  Stock. 

(e)  Inspection  of  Corporate  Books  and  Records. 

(f)  Financial  Statement. 

(g)  Dissolution. 

92.  Liability  of  Holders  of  Full  Paid  Stock. 

(a)  Liability  to  Employees. 

(b)  Full    Liability    Companies. 

93.  Liability  of  Holders  of  Stock  Not  Full  Paid. 

94.  Personal  and  Representative  Liability. 

95.  Relations  of  Stockholders  to  Each  Other. 

96.  Relations  of  Stockholders  to  the  State. 

97.  Powers  of  the  Majority. 

98.  Voting  Trusts. 

Chapter  X.     Stockholders'  Meeting. 

(Annual   Meeting.) 

§    99.  General. 

100.  Place. 

101.  Notice. 

(a)  Waiver  of  Notice. 

(b)  Notice  of  Annual  Meeting. 

(c)  Notice  Same  as  for  Annual  Meeting. 

(d)  Stockholders'    Notice   of    Special    Election   of   Directors. 

(e)  Notice  of  Meeting  for  Increase  or  Decrease  of  Capital 

Stock. 

(f)  Notice  of  Meeting  to  Change  Number  of  Directors. 

(g)  "         "  to  Alter  or  Extend  Business, 
(h)         "         "  for  Dissolution. 

(i)         "        "  to  Guarantee  Bonds  of  Another  Cor- 

poration, 
(j)     Notice  of  Meeting  Not  Otherwise  Provided. 

102.  Quorum. 

103.  Right  to  Vote. 


TABLE  OF  CONTENTS.  IX 

104.  Proxies. 

105.  Closing  Stock  Books. 

106.  Election   of   Directors. 

107.  Cumulative  Voting. 

108.  Inspectors  of  Election. 

109.  Challenges. 

no.  Contested   Elections. 

in.  Effect  of  Failure  to  Elect  Directors. 

112.  Special  Elections. 

Chapter  XI.     Directors. 

§  113.  Number. 

114.  Election. 

115.  Classification. 

116.  Vacancies. 

117.  Qualifications  of  Directors. 

118.  Compensation  of  Directors. 

119.  Powers   of   Directors. 

120.  Powers  of  Directors  in  Case  of  Dissolution. 

121.  Relations  of  Directors  to  Corporation  and   Stockholders. 

122.  Directors'  Liability  for  Negligence. 

123.  Statutory  Liability  of  Directors. 

124.  Directors'  Liability  to  Creditors. 

125.  Directors'  Meetings. 

(a)  Place. 

(b)  Notice. 

(c)  Quorum. 

(d)  Voting. 

126.  Standing  Committees. 

Chapter  XII.    Officers. 

§  127.  The  Corporate  Officers. 

128.  Qualifications. 

129.  Security. 

130.  Powers. 

131.  Personal  Liabilities  of  Officers. 

(a)  To  the  Corporation. 

(b)  To  Third  Persons. 

(c)  Penal  Statutory  Liability. 

132.  Tenure  of  Office. 

133.  Compensation. 


X  TABLE  OF  CONTENTS. 

Chapter  XIII.     Principal  Office.     Corporate  Books. 

:- ".-''•'    si;'-°'— -" 
§  134.  Location  of  Principal  Office. 

135.  Corporate  Books. 

136.  The  Stock  Book. 

137.  Right  to  Inspect  Corporate  Books. 

Chapter  XIV.     State  Taxation. 

§  138.  Franchise  Tax. 

139.  "Capital  Stock  Employed  Within  the  State." 

140.  Deduction  of  Debts. 

141.  United  States  Securities. 

142.  Patents  and  Copyrights. 

143.  Good  Will. 

144.  Meaning  of  "Employed  Within  the  State." 

145.  Classification  of  Corporations  for  Purposes  of  Franchise  Tax- 

ation. 

146.  (i)     Corporations  Paying  Dividends  Not  Less  Than  Six  Per 

Cent. 

147.  (2)     Corporations  Paying  Dividends  Less  Than  Six  Per  Cent. 

148.  (3)     Corporations  Paying  No  Dividends. 

149.  Corporations  Exempt  from  Franchise  Tax. 

150.  What  Are  Manufacturing  Companies? 

151.  Stock  Transfer  Tax. 

152.  "  "  "       Rules  of  the  State  Comptroller's  Office. 

Chapter  XV.    Local  Taxation. 

§  153.  Tax  District. 

154.  Taxation  of  Realty. 

155.  Taxation  of  Personalty. 

156.  Place  of  Assessment  of  Personalty. 

157.  Manner  of  Assessing  Personalty. 

158.  Deductions  before  Assessment  of  Personalty. 

159.  (i)  Real  Estate. 

160.  (2)  Debts  and  Liabilities. 

161.  (3)  Shares  of  Stock. 

162.  (4)  Surplus  or  Reserve. 

163.  (5)  Stock  Held  by  State,  etc. 

164.  (6)  Property  in  Other  States. 

165.  (7)  United  States  Securities. 

166.  (8)  Patents  and  Copyrights. 
J67.  (9)  Imported  Goods. 

168.     (10)     Good  Will. 


TABLE  OF  CONTENTS.  XI 

169.  (n)     Mortgages. 

170.  Date  of  Assessment. 

171.  New  York  City. 

172.  Special  Franchises. 

Chapter  XVI.    Reports. 

§  173.  Required  Reports. 

174.  Annual  Report.  V 

175.  Report  to  State  Comptroller.     Franchise  Tax. 

176.  Local  Tax  Report. 

Chapter  XVII.    Foreign  Corporations. 

§  177.  Status  of  Foreign  Corporations. 

178.  What  Constitutes  "Doing  Business  in  the  State." 

179.  Foreign  Corporations  with  Resident  Incorporators. 

180.  Procedure  to  Secure  Admission  to  State. 

181.  Fees. 

182.  Status  of  Foreign  Corporations  when  Licensed. 

183.  Penalties  for  Non-Compliance. 

184.  Principal  Office. 

185.  State  Taxation.     License  Tax. 

186.  "  Annual  Privilege  Tax. 

187.  Local  Taxation. 

188.  Books  Required  to  be  Kept  by  Foreign  Corporations. 

189.  Reports. 

190.  Attachment  Against. 

PART  II.— FORMS  AND  PRECEDENTS. 
Chapter  XVIII.    Organization.    Forms. 

Form. 

1.  Subscription  List. 

2.  "  "       Trustee's. 

3.  Subscription  Blank.     Individual. 

4.  After  Organization. 

5.  Certificate  of  Incorporation. 

(a)  Usual  Form. 

(b)  Extended  Purposes. 

(c)  Preferred  Stock. 

(d)  Special  Provisions. 

6.  By-Laws.     Short  Set. 

7.  Extended   Form. 

8.  Certification  of  By-Laws. 


Xll  TABLE  OF  CONTENTS. 

Chapter  XIX.     Forms  for  First  Meetings. 

Form. 

9.  Proxy. 

10.  Call  and  Waiver.       Stockholders'. 

11.  "       "  Directors'. 

12.  Exchange    of    Property    for    Stock.     Proposal. 

13.  Stockholders'    Resolution. 

14.  Directors' 

15.  Minutes.     Stockholders'. 

16.  "  Directors'. 

Chapter  XX.     Meetings.     Forms. 

Form. 

17.  Notice  of  Annual  Meeting. 

18.  "        "  Publication. 

19.  Oath.     Inspectors  of  Election. 

20.  Certificate.     Inspectors  of  Election. 

21.  Call.     Special  Meeting  of  Stockholders. 

22.  Notice.     "  " 

23.  "      Regular  Meeting  of  Directors. 

24.  Call.     Special 

25.  Notice.     " 

26.  Proxy.     Simple. 

27.  Formal  Proxy.     Annual  Meeting. 

28.  Revocation  of  Proxy. 

Chapter  XXI.     Stock  Certificates  and  Stock  Books. 
Form. 

29.  Stock  Certificate.     Common. 

30.  "  Preferred. 

31.  Assignment  of  Stock  Certificate.     In  Blank. 

32.  Complete. 

33.  Indemnity  Bond.     Reissue  of  Lost  Certificate. 

34.  Transfer  Book. 

35.  Stock  Book  and  Stock  Ledger. 

Chapter  XXII.     Signatures  and  Certificates. 

Form. 

36.  Official  Signatures. 

(a)  Informal. 

(b)  Formal. 

37-  Corporate  Signatures. 

(a)  Incomplete. 

(b)  Complete. 

(c)  Attestation  of  Seal. 

(d)  Testimonium. 


TABLE  OF  CONTENTS.  Xlll 

38.  Corporate   Endorsements. 

(a)  Simple. 

(b)  For  Deposit. 

39.  Corporate  Acknowledgment. 

40.  Treasurer's  Affidavit. 

41.  Certification.     Extract  from  Minutes. 

42.  Certified  Resolution   for   Bank. 

43.  Certificate.     Payment  of  One-half  of  Capital  Stock. 

Chapter  XXIII.     Forms  of  Reports. 
Form. 

44.  Annual  Report. 

45.  Report  to  Comptroller.     Domestic  Corporation. 

46.  "       "  Appraisement  of  Stock. 

47.  "        "  Foreign  Corporation. 

48.  Statement  to   Comptroller.     To   Secure    Exemption   as   Manufac- 

turing Corporation. 

49.  Local  Tax  Report. 

(a)  General  Form. 

(b)  New  York  City. 

(c)  Rochester. 

(d)  Syracuse. 

Chapter  XXIV.     Sundry  Instruments. 

Form. 

50.  Application  for  Admission  to  State  by  Foreign  Corporation. 

(a)  Statement  and  Designation  of  Agent. 

(b)  Consent  of  Agent. 

(c)  Affidavit  to  Certificate  of  Incorporation. 

51.  Agency  Changes.     Foreign  Corporation. 

(a)  Revocation   and   New  Designation   of  Agent. 

(b)  Certificate  of  Change  of  Office. 

52.  Charter  Amendment.     Change  of  Name. 

(a)  Resolution  of  Directors  Authorizing  Change. 

(b)  Publication  Notice. 

(c)  Petition. 

(d)  Order. 

53.  Charter  Amendment.     Change  of  Principal  Office. 

(a)  Written  Consent  of  Stockholders. 

(b)  Certificate  of  Removal. 

(c)  Vote  of  Stockholders. 

54.  Charter  Amendment.     Classification  of  Stock. 

(a)  Publication  Notice. 

(b)  Certificate. 


XIV  TABLE  OF  CONTENTS. 

55.  Charter  Amendment.     Increase  of  Stock. 

(a)  By  Unanimous  Consent. 

(b)  "    Vote  of  Stockholders. 

56.  Charter  Amendment.     Increase  of  Number  of  Directors. 

(a)  Notice  of  Meeting. 

(b)  Proof  of  Service. 

(c)  Transcript  of  Proceedings. 

(d)  Unanimous  Consent. 

57.  Voluntary  Dissolution. 

(a)  Certificate. 

(b)  Consent  of  Stockholders. 

(c)  Statement  of  Secretary. 

(d)  Affidavit  of  Secretary. 

58.  Voting  Trust  Agreement. 

59.  Underwriting  Agreement. 

60.  Resolution  Declaring  Dividend. 

61.  Notice  of  Dividend. 

62.  Treasurer's  Bond. 

63.  Corporate  Calendar. 

Chapter  XXV.    Bond  Issues. 

Form. 

64.  Stockholders'  Resolution  Authorizing  Mortgage. 

65.  Written  Consent  to  Mortgage. 

66.  Certificate  of  Consent  to  Mortgage. 

67.  Directors'  Resolution  Authorizing  Bond  Issue. 

68.  Deed  of  Trust,  Including  Forms  of  Bond  and  Coupon. 

PART  III.— STATUTES. 

1.  The  Business  Corporations  Law. 

2.  The  Stock  Corporation  Law. 

3.  The  General  Corporation  Law. 

4.  The  Transportation  Corporations  Law. 

5.  Filing  and  Recording  Fees. 

(a)  Fees  to  Secretary  of  State. 

(b)  "       "    County  Clerks. 

(c)  Table  of  Fees. 

6.  The  Tax  Law. 

(a)  Local  Tax. 

(b)  State  Tax. 

(c)  Stock  Transfer  Tax. 

7.  Code  of  Civil  Procedure. 

8.  Penal  Code. 

9.  Miscellaneous  Statutory  Provisions  Affecting  Corporations. 


NEW  YORK  CORPORATIONS. 


PART  I.— PROCEDURE. 


CHAPTER  I. 
CORPORATION  LAWS. 


§  i.     Creation  of  Corporations. 

Corporations  are  the  creatures  of  the  legislature  and  de- 
rive their  right  to  exist  and  their  privileges  entirely  from  legis- 
lative grant.  Thomas  v.  West  Jersey  Ry.,  101  U.  S.  71 
(1879).  The  power  of  the  legislature  to  create  corporations 
is  absolute  except  where  limited  by  the  state  or  national  con- 
stitutions. Louisville  Gas  Co.  v.  Citizens'  Gas  Light  Co., 
115  U.  S.  683  (1885). 

§  2.     Constitutional  Provisions. 

The  New  York  Constitution  provides  as  follows : 
"Corporations  may  be  formed  under  general  laws;  but 
shall  not  be  created  by  special  act,  except  for  municipal  pur- 
poses, and  in  cases  where,  in  the  judgment  of  the  Legislature, 
the  objects  of  the  corporation  can  not  be  attained  under  gen- 
eral laws."  (Art.  VIII,  §  i.) 

IS 


1 6  NEW   YORK    CORPORATIONS. 

It  is  settled  that  this  section  leaves  the  necessity  for  in- 
corporation by  special  act  entirely  to  the  judgment  of  the 
legislature  and  that  the  existence  of  a  general  law  under 
which  a  corporation  might  be  created,  does  not  render  a  special 
act  of  incorporation  unconstitutional  or  open  to  judicial  re- 
view. Met.  Bank  v.  Van  Dyck,  27  N.  Y.  400,  448  (1863). 
A  charter  obtained  under  a  general  law  may  be  amended  by 
special  act.  In  re  Prospect  Park  &  C.  I.  Ry.,  67  N.  Y.  371 
(1876). 

The  Constitution,  however,  prohibits  any  private  or  local 
bill  (Matter  of  N.  Y.  El.  Ry.,  70  N.  Y.  327,  345  [1877]) : 

(1)  "Granting  to  any  corporation,  association  or 
individual  the  right  to  lay  down  railroad  tracks.     (Held 
not  to  apply  to  a  municipality.     Sun  v.  Mayor  of  N.  Y., 
152  N.  Y.  257  [1897].) 

(2)  "Granting  to   any  private  corporation,   asso- 
ciation or  individual  any  exclusive  privilege,   immunity 
or  franchise  whatever.    In  re  Union  Ferry  Co.,  98  N.  Y. 
139,  151  (1885). 

(3)  "Providing  for  public  bridges  and  chartering 
companies  for  such  purposes,  except  on  the  Hudson  River 
below  Waterford  and  on  the  East  River,  or  over  the 
waters  forming  a  part  of  the  boundaries  of  the  State." 
(Art.  Ill,  §  1 8.) 

State  or  municipal  aid  to  private  corporations  is  prohib- 
ited. (Art.  VIII,  §§9,  10.)  It  is  also  provided  that  all  cor- 
porations shall  have  the  right  to  sue  and  shall  be  subject  to 
be  sued  in  all  courts  in  like  cases  as  natural  persons.  (Art. 
VIII,  §  3.) 

§  3.     Statutes. 

In  accordance  with  the  provisions  of  Art.  VIII  of  the 
Constitution,  the  legislature  has  enacted  general  statutes  which 


CORPORATION  LAWS.  17 

provide  for  and  control  the  organization  and  management  of 
business  corporations.  Prior  to  1890  these  laws  existed — as 
far  as  then  enacted — only  as  disconnected  session  laws.  In 
that  year,  however,  the  legislature  in  accord  with  the  policy 
of  substituting  general  statutes  for  scattered  session  laws,  col- 
lected, classified  and  grouped  most  of  these  corporation  laws 
under  distinctive  titles. 

The  most  important  and  generally  applicable  of  these 
groups  are  the  "General  Corporation  Law,"  the  "Business 
Corporations  Law,"  and  the  "Stock  Corporation  Law."  In 
addition  to  these,  there  are  various  special  statutes  as  the 
"Transportation  Corporations  Law,"  the  "Railroad  Law,"  the 
"Banking  Law,"  etc.,  etc. 

§  4.     The  Business  Corporations  Law. 

The  statutes  relating  to  the  creation  of  stock  corporations 
"for  any  lawful  business  purpose  or  purposes  other  than  a 
moneyed  corporation,  or  a  corporation  provided  for  by  the 
banking,  the  insurance,  the  railroad  and  the  transportation 
corporation  laws"  (B.  C.  L.,  §  2),  are  grouped  and  entitled 
the  "Business  Corporations  Law."  This  law  relates  to  busi- 
ness corporations  only,  the  term  including  trading,  mining 
and  manufacturing  companies  and  containing  detailed  direc- 
tions for  their  formation,  consolidation  and  reorganization. 
( See  page  294,  et  seq.  for  the  Business  Corporations  Law. ) 

§  5.     The  Stock  Corporation  Law. 

The  statutory  details  relating  to  the  management,  rights 
and  powers  of  stock  corporations  of  every  kind,  and  the  rights, 
powers  and  duties  of  their  officers,  directors  and  stockholders, 
are  brought  together  under  the  title  the  "Stock  Corporation 
Law."  This  law  applies  to  all  corporations  having  a  capital 
stock,  including  those  formed  under  the  Business  Corporations 


1 8  NEW   YORK   CORPORATIONS. 

Law.  It  supplies  general  provisions  and  details  of  procedure 
which  are  not  found  in  the  Business  Corporations  Law.  (See 
page  302,  et  seq.  for  the  Stock  Corporation  Law. ) 

§  6.     The  General  Corporation  Law. 

All  those  laws  which  apply  to  both  stock  and  non-stock 
corporations  and  which  could  not  therefore  properly  be  in- 
cluded in  either  the  Business  Corporations  Law  or  the  Stock 
Corporation  Law  are  collected  under  the  title  of  the  "General 
Corporation  Law."  Business  corporations  fall  under  this  law 
also  and  are  therefore  subject  to  the  provisions  of  all  three 
groups  of  statutes.  This  necessitates  reference  to  each  group 
to  determine  the  mode  of  creation,  the  powers,  privileges  and 
obligations  of  corporations  of  this  nature.  (See  page  324, 
et  seq.  for  the  General  Corporation  Law.) 

§  7.     Relative  Force  of  General  and  Special  Statutes. 

The  character  of  the  General  and  Stock  Corporation 
Laws  is  very  sweeping  and  this  has  led  the  legislature  to 
provide  that  if  other  corporate  laws  conflict,  the  provisions  of 
the  latter  shall  prevail.  (G.  C.  L.,  §  33.)  If,  however,  an- 
other act  covers  a  subject  provided  for  by  either  law,  but  is 
not  in  conflict  therewith,  the  former  is  supplemented  by  the 
provisions  of  the  latter. 

In  the  present  volume  under  each  heading  are  included 
the  provisions  of  all  general  laws  bearing  upon  the  subject  of 
the  particular  heading  and  also  of  any  special  statutes  in 
point. 

§  8.     General  Statutory  Law. 

Additional  acts,  affecting  corporations,  considered  in 
whole  or  in  part  in  the  present  volume,  are  as  follows : 

The  "Transportation  Corporations  Law,"  which  covers 


CORPORATION   LAWS.  1 9 

the  incorporation  and  regulation  of  all  transportation  corpora- 
tions except  railroads,  and  includes  navigation,  gas,  electric 
light,  telegraph  and  telephone  corporations.  (See  page  337, 
et.  seq.} 

The  important  provisions  of  the  "Tax  Law"  applying  to 
corporations.  (See  page  349,  et  seq.)  Also  the  "Tax  Law  on 
Transfers  of  Stock."  (See  page  360,  et  seq.} 

The  important  provisions  of  the  "Code  of  Civil  Pro- 
cedure" and  of  the  "Penal  Code"  applicable  to  corporations 
are  given.  (See  page  363,  et  seq.) 

The  statutory  provisions  as  to  fees  to  public  officials 
with  table  of  fees  are  also  given.  (See  page  346,  et  seq.} 

The  important  miscellaneous  statutory  provisions  affect- 
ing corporations  are  also  included.  (See  page  387,  et  seq.) 

Important  acts,  affecting  corporations,  which  are  not  con- 
sidered in  the  present  volume  because  they  apply  only  to 
classes  of  corporations  outside  its  scope,  are  as  follows: 

The  "Banking  Law,"  which  applies  to  state  banks,  sav- 
ings banks,  trust  companies,  building  and  mutual  loan  cor- 
porations, co-operative  loan  associations,  mortgage  loan  and 
investment  corporations  and  safe  deposit  companies,  all  of 
which  are  referred  to  as  "moneyed  corporations." 

The  "Membership  Corporation  Law,"  which  applies  to 
corporations  not  formed  for  pecuniary  profit.  This  law  con- 
tains provisions  for  the  incorporation  and  management  of 
cemetery  and  fire  corporations,  corporations  for  the  preven- 
tion of  cruelty,  hospitals,  Christian,  bar  and  veteran  associa- 
tions, soldiers  monument  corporations,  boards  of  trade  and 
agricultural  corporations.  A  special  law,  known  as  the 
"Benevolent  Orders  Law,"  applies  to  societies  which  include 
benefit  insurance  to  members.  (L.  1895,  Ch.  559.) 

The  "Insurance  Law,"  which  regulates  insurance  com- 
panies. (L.  1892,  Ch.  690.) 

The  "Railroad  Law,"  which  applies  to  both  steam  and 


2O  NEW   YORK    CORPORATIONS. 

street  railways.     (L.  1890,  Ch.  565,  as  amended  by  L.  1902, 
Ch.  676.) 

The  "Religious  Corporations  Law,"  which  provides  for 
the  incorporation  of  churches  of  all  denominations.  (L.  1895, 
Ch.  723.) 

§  g.     Common  Law. 

All  matters  of  corporate  procedure  not  expressly  provided 
for  by  statute  law,  are  governed  by  the  rules  of  the  common 
law.  These  are,  in  the  main,  the  same  in  all  parts  of  the 
country.  They  are  only  discussed  incidentally  in  the  present 
volume  in  connection  with  the  New  York  statute  law,  the 
limits  of  space  preventing  a  full  presentation. 


CHAPTER  II. 
EXPENSES  OF  INCORPORATION. 


§  10.     Organization  Expenses. 

The  expenses  involved  in  the  formalities  of  incorporation 
are  primarily  the  organization  tax  on  the  capitalization  of  the 
proposed  corporation,  the  filing  and  recording  fees  to  Secre- 
tary of  State  and  to  the  clerk  of  the  county  in  which  the  prin- 
cipal office  is  located,  and  the  incidental  fees  for  acknowledg- 
ments, etc. 

The  fees  for  acknowledgments,  etc.,  are  usually  trifling, 
the  entire  necessary  incidental  expenses,  including  filing  and 
recording  fees  to  Secretary  of  State,  rarely  exceeding  $15. 

§11.     Organization  Tax. 

The  organization  tax  is  one-twentieth  of  one  per  cent, 
of  the  amount  of  capital  stock  authorized  by  the  certificate  of 
incorporation,  but  in  no  case  less  than  $i.  (Tax  Law,  §  180.) 
This  tax  must  be  sent  direct  to  the  State  Treasurer — not  to 
the  Secretary  of  State — in  cash,  postal  or  express  order,  New 
York  draft  or  certified  check,  payable  to  "State  Treasurer" 
or  "Treasurer  of  the  State  of  New  York."  Checks  sent  in 
payment  of  the  organization  tax  must,  by  a  rule  of  the  Treas- 
urer's office,  be  certified. 

Corporations  formed  by  the  reorganization  or  consoli- 
dation of  existing  domestic  companies  (See  §§  70,  71),  pay 
this  tax  only  upon  capitalization  in  excess  of  the  aggregate 
amount  of  capital  stock  of  the  constituent  companies.  (Tax 
Law,  §  1 80.) 

21 


22  NEW    YORK    CORPORATIONS. 

A  reorganization  of  an  existing  corporation,  under  §  4 
of  the  Business  Corporations  Law,  is  a  "corporate  act"  and 
does  not  result  in  the  creation  of  a  new  corporation.  There- 
fore no  tax  need  be  paid,  unless  the  capitalization  of  the  com- 
pany, as  reorganized,  is  increased.  Matter  of  Kansas  City 
Smelting  Co.,  13  App.  Div.  50  (1897). 

§  12.     Fees  to  Secretary  of  State. 

The  filing  fee  to  Secretary  of  State  is  $10,  regardless  of 
the  amount  of  capitalization,  and  the  recording  fee  is  15  cents 
per  folio  of  100  words.  These  fees  must  be  sent  direct  to  the 
Secretary  of  State  together  with  the  papers  to  be  filed  and 
recorded.  If  a  certified  copy  of  the  charter  is  desired,  it  may 
be  obtained  upon  payment  to  the  Secretary  of  State  of  15 
cents  per  folio  and  $i  additional  for  certificate  under  seal.r 
(See  §  28;  also  "Table  of  Fees,"  page  347.)  Remittance  to 
the  Secretary  of  State  must  be  made  in  cash  or  by  certified 
check,  New  York  draft,  postal  or  express  order. 

§  13.     Fees  to  County  Clerk. 

The  fees  to  the  county  clerk  are  6  cents  for  filing  charter 
and  10  cents  per  folio  for  recording  same.  (Code  Civ.  Pro., 
§  3304.)  (See  §  29;  also  "Table  of  Fees,"  page  347.)  If  a 
copy  of  the  charter  is  desired  it  may  be  obtained  from  the 
county  clerk  for  8  cents  per  folio  of  TOO  words. 

§  14.     Table  of  Organization  Expenses. 

The  following  table  of  organization  expenses  is  given  for 
ready  reference.  The  incidental  fees,  estimated  at  $15,  are 
added  to  the  organization  tax  in  computing  the  total  expense 
of  incorporation.  The  franchise  tax  is  also  given  in  order  to 
facilitate  computation  of  the  general  expense  involved  in  in- 
corporation. This  franchise  tax  has  been  computed  on  the 
basis  of  six  per  cent,  dividends. 


EXPENSES    ON    INCORPORATION. 


Organization  Expenses  and  Franchise  Tax. 


Total  Annual  Franchise 

Expense         Tax,  6  $  Dividend* 

$     16.00 $           .75 

16.00 3.00 

16.25 3.75 

16.50 4.50 

17.00 6.00 

I7-50 7-50 

18.00 9.00 

18.50 10.50 

18.75 I][-25 

IQ.OO I2.OO 

I9-50 I3-50 

20.00 I5.OO 

2I.OO 18.00 

22.50 22.50 

25.OO 3O.OO 

27-50 37-50 

35.OO.  ....  6O.OO 

40.00 75-OO 

45.00 90.00 

50.00 105.00 

52.50 112.50 

55-OO I2O.OO 

65.00 I5O.OO 

9O.OO 225.OO 

IO2.50 262.50 

II5.OO 300.00 

140.00 375-oo 

165.00 450.00 

215.00 600.00 

265.00 750.00 

365-00 1,050.00 

515-0° 1,500.00 

765.00 2,250.00 

1,015.00 3,000.00 

5,015.00 15,000.00 


Capitalization 

Organization 
Tax 

i                   500  $ 

I.OO.  .  . 

. 

2,OOO  

I.OO.  .  . 

. 

2,500  

1.25... 

.' 

3,000  

L50... 

• 

4,000  

2.OO.  .  . 

. 

5,000  

2.50..  . 

. 

6,000  

3.00..  . 

. 

7,000  

3-50..  • 

. 

7,500  

3-75-  •• 

. 

8,000  

4.00  .  .  . 

9,000  

4.50..  . 

• 

10,000  

5.00..  . 

12,000  

6.00.  .  . 

. 

15,000  

7.50... 

. 

20,000  

IO.OO.  .  . 

25,000  

12.50..  . 

. 

40,000  

20.00.  .  . 

. 

50,000  

25.00..  . 

. 

60,000  

3O.OO.  .  . 

. 

70,000  

35-00..  . 

• 

75,00°  

37-50..- 

80,000  

40.00.  .  . 

. 

100,000  

50.00..  . 

.-- 

150,000.  .... 

75.00..  . 

. 

i75,ooo  

87.50... 

200,000  

100.00.  .  . 

250,000  

125.00.  .  . 

. 

300,000  

150.00.  .  . 

• 

400,000  

200.00.  .  . 

500,000  

250.00.  .  . 

• 

700,000  

350.00..  . 

.• 

1,000,000  

500.00.  .  . 

» 

1,500,000  

750.00..  . 

2,000,000  i, 

ooo.oo  .  .  . 

10,000,000  5, 

ooo.oo.  .  . 

*  See  Ch.  XIV,   "State 

Taxation." 

CHAPTER  III. 
CERTIFICATE  OF  INCORPORATION. 


§  15.     Incorporators. 

Under  the  New  York  statutes,  three  or  more  qualified 
persons  may  form  a  corporation  for  any  lawful  business  other 
than  that  of  a  moneyed  corporation,  or  of  a  corporation  form- 
ed under  the  banking,  insurance,  railroad  or  transportation 
corporation  laws.  (B.  C.  L.,  §  2.) 

The  statute  prescribes  that  incorporators  shall  be  natural 
persons  of  full  age,  two-thirds  of  them  citizens  of  the  United 
States,  and  one,  at  least,  a  resident  of  the  State  of  New  York. 
(G.  C.  L.,  §4.)  Corporations,  copartnerships,  minors  and 
persons  acting  in  a  representative  capacity  are  therefore  ex- 
cluded but  aliens  may  act,  if  otherwise  qualified,  so  long  as  the 
proper  proportion  of  citizens  and  residents  is  maintained. 

The  charter  is  a  contract  between  the  State  and  the  in- 
corporators. Dartmouth  College  v.  Woodward,  14  Wheat. 
518  (1819).  The  latter  must,  therefore,  in  addition  to  the 
statutory  requirements,  be  persons  capable  of  entering  into  a 
binding  contract.  Since  married  women  may  now  freely  con- 
tract, and  may  and  do  act  as  incorporators,  the  only  practical 
importance  of  this  restriction  is  the  exclusion  of  minors  and 
others  of  insufficient  mental  capacity  to  make  a  legal  contract. 

Each  of  the  incorporators  must  be  a  subscriber  to  the 
stock  of  the  corporation  and  his  subscription  must  be  set  forth 
in  the  certificate  of  incorporation.  (B.  C.  L.,  §  2.)  (See 
§  25.)  One  share  is  enough  to  satisfy  this  requirement.  The 

24 


CERTIFICATE    OF    INCORPORATION.  25 

allowance  of  the  charter  serves  as  an  acceptance  of  the  incor- 
porators'  subscriptions  and  they  are  then  stockholders  of  the 
company.  Woods  Motor  Vehicle  Co.  v.  Brady,  39  Misc.  79, 
83  (1902).  Reversed  on  other  grounds,  181  N.  Y.  145 

(1905). 

All  of  the  incorporators  must  sign  and  acknowledge  the 
charter.  (B.  C.  L.,  §  2.)  (See  §  27.)  If  the  number  of  in- 
corporators is  large,  this  requirement  may  involve  consider- 
able delay  and  trouble,  and,  for  this  reason,  in  practice  the 
number  is  usually  limited, — commonly  to  the  minimum  al- 
lowed by  the  statutes. 

The  statutory  requirements  in  regard  to  incorporation 
must  be  followed  with  exactness  and  the  duties  devolving  upon 
incorporators  are  technical  and  somewhat  onerous.  To  re- 
lieve the  real  parties  in  interest  from  these  perfunctory  but 
necessary  details,  it  is  not  uncommon  to  employ  one  or  more 
"dummies"  to  act  as  incorporators,  that  is  persons  who  have 
no  direct  interest  in  the  corporation  to  be  formed,  but  who 
act  as  incorporators,  effect  the  incorporation  and  organiza- 
tion as  far  as  required,  and  then  step  out  to  make  way  for 
those  really  concerned. 

Serious  personal  inconvenience  to  principals,  involved  in 
attendance  at  the  purely  formal  organization  meetings,  is  often 
avoided  by  this  use  of  dummies.  At  times  they  are  employed 
as  a  convenient  means  of  concealing  the  identity  of  the  real 
parties  in  interest  until  these  latter  are  ready  to  be  known. 
The  use  of  dummies  is  also  resorted  to,  on  occasion,  to  meet 
the  statutory  requirements  as  to  the  citizenship  and  residence 
of  the  incorporators  when  the  real  parties  are  not  qualified. 
As  neither  citizenship  nor  residence  is  prescribed  for  directors, 
save  that  one  must  be  a  resident  of  the  state  (G.  C.  L.,  §  29), 
the  principals  may  come  forward,  as  soon  as  the  company  is 
organized,  and  legally  assume  control. 

"Dummies"  are  usually  friends  or  employees  of  the  in- 
terested parties  and  act  under  the  supervision  of  the  incor- 


26  NEW   YORK   CORPORATIONS. 

porating  counsel.  They  often  carry  affairs  through  the  first 
meetings,  acting  as  both  incorporators  and  directors,  adopting 
by-laws,  electing  officers  and  transacting  business  of  the  great- 
est importance  to  the  new  company. 

When  dummies  are  employed  their  subscriptions  are 
usually  paid  either  by  check  advanced  for  the  purpose,  or  by 
inclusion  of  their  stock  with  that  issued  in  exchange  for 
property.  In  either  case,  if  the  amounts  of  the  subscriptions 
are  at  all  material,  the  dummies  are  required  to  assign  these 
subscriptions  before  payment,  or  to  sign  an  order  for  the 
issue  of  the  stock  to  the  real  owners,  or  to  assign  their  cer- 
tificates of  stock  as  soon  as  issued. 

There  is  nothing  illegal  in  the  use  of  dummy  incorpor- 
ators, and,  though  the  practice  is  severely  criticised,  it  has 
been  upheld  by  the  highest  courts.  Dickerman  v.  Northern 
Trust  Company,  176  U.  S.  181  (1900). 

§  16.     Certificate  of  Incorporation. 

The  certificate  of  incorporation,  or  charter,  is  a  formal 
statement  of  certain  facts  relating  to  the  proposed  corpora- 
tion, required  by  the  State  before  permission  to  exist  as  a 
corporation  will  be  granted.  It  is  also  an  application  for  the 
privileges  and  powers  offered  by  the  statute.  Upon  filing  and 
recording  by  the  Secretary  of  State  the  instrument,  though  in 
form  merely  an  application,  becomes  itself  the  formal  grant 
of  powers  by  the  State.  (See  Form  5.) 

Certain  general  powers  are  common  to  all  corporations. 
These  are  secured  as  an  incident  of  incorporation  and  with- 
out specific  application.  (G.  C.  L.,  §  n.)  (See  §  57.)  The 
corporation  has  only  such  special  powers,  however,  as  are  set 
forth  in  the  charter.  Great  care  should  be  taken  to  include 
in  the  original  certificate  all  necessary  rights  and  privileges, 
as  amendment  is  often  a  complicated  and  troublesome  matter. 
At  the  same  time,  the  jungle  of  print  so  frequently  employed 


CERTIFICATE    OF    INCORPORATION.  27 

in  the  purpose  clause  of  charters  is  not  to  be  recommended. 
It  is  often  aimless  and  confusing  and  is  sometimes  actually 
restrictive  through  its  very  attempt  to  be  all  inclusive.  A  very 
full  statement  of  purposes  is  at  times  necessary  or  advisable, 
but  as  a  rule  a  direct,  clear  statement  of  comparative  brevity 
is  preferable. 

The  charter  purposes  may  only  be  such  as  are  allowed  by 
law,  and  if,  through  inadvertence  or  design,  illegal  provisions 
find  their  way  into  the  instrument  as  filed,  they  are  of  no 
force  or  effect. 

The  certificate  should  be  written  in  English  and,  as  a 
matter  of  convenience,  is  usually  prepared  in  triplicate;  two 
copies  to  be  filed,  one  with  the  state  and  one  with  the  county 
officers,  and  the  third  copy  to  be  retained  for  the  corporate 
records.  All  should  be  signed,  but  only  those  for  filing  need 
be  acknowledged.  (G.  C.  L.,  §  5.)  (See  §  27.) 

§  17.     Contents  of  Certificate  of  Incorporation. 

The  following  from  the  opinion  of  Judge  Earl  is  a  good 
statement  of  the  scope  of  the  certificate  of  incorporation : 

"Persons  seeking  to  form  a  corporation  under  any  gen- 
eral law  must  have  a  reasonable  latitude  as  to  what  they  may 
insert  in  their  certificate  of  incorporation.  They  must  insert 
therein  all  the  matter  particularly  required  by  the  law,  and 
they  may  insert  other  provisions  not  inconsistent  with  law  or 
public  policy  which  are  germane  to  the  purposes  of  the  cor- 
poration, and  necessary,  convenient  or  appropriate  to  the  ac- 
complishment of  such  purpose.  If  they  keep  within  such 
limits  the  public  authorities  have  no  reason  to  interfere,  the 
interests  of  the  public  are  not  jeopardized,  and  the  rights  of 
no  citizen  are  violated."  People  ex  rel  Fairchild  v.  Preston, 
140  N.  Y.  549,  552  (1894). 

The  statutes  require  certain  facts  concerning  the  corpor- 
ation and  its  purposes  to  be  set  forth  in  the  charter.  These 


28  NEW    YORK    CORPORATIONS. 

facts  must  appear  or  the  charter  will  not  be  filed.  In  addi- 
tion, by  express  enactment,  other  provisions  not  inconsistent 
with  the  statutes  may  be  inserted  at  the  discretion  of  the  in- 
corporators.  Judge  Earl's  opinion,  already  quoted,  seems 
to  indicate  that  this  right  existed  before  the  enactment  of  the 
present  permissive  statutes.  In  any  event  the  statutes  serve 
to  remove  the  doubt  that  might  otherwise  have  existed  and 
to  indicate  clearly  the  limitations  that  do  exist.  (See  §  26.) 
The  facts  required  by  the  statutes  as  a  necessary  feature 
of  the  charter  application,  are  as  follows : 

§  18.     (i)   Name. 

"The  name  of  the  proposed  corporation."  (B.  C.  L., 
§  2,  subdiv.  i.) 

The  New  York  statute  prohibits  the  use  of  the  word 
trust,  bank,  banking,  insurance,  assurance,  indemnity,  guar- 
antee, guaranty,  savings,  investment,  loan  or  benefit  as  part 
of  the  corporate  name  unless  such  company  is  formed  under 
the  banking  or  insurance  law.  (G.  C.  L.,  §  6.) 

The  corporate  name  is  frequently  one  of  the  most  valu- 
able of  the  corporate  assets.  It  is  treated  by  the  courts  as  a 
true  property  right  of  a  nature  similar  to  the  trade-mark. 
Higgins  Co.  v.  Higgins  Soap  Co.,  144  N.  Y.  462,  468  (1895). 
New  York  has  attempted  to  prevent  its  initial  infringement  by 
providing  that:  "No  certificate  of  incorporation  of  a  pro- 
posed corporation  having  the  same  name  as  a  corporation 
authorized  to  do  business  under  the  laws  of  this  state,  or  a 
name  so  nearly  resembling  it  as  to  be  calculated  to  deceive, 
shall  be  filed  or  recorded  in  any  office  for  the  purpose  of 
effecting  its  incorporation  or  of  authorizing  it  to  do  business 
in  this  state."  (G.  C.  L.,  §  6.) 

This  protects  not  only  domestic  companies  but  also  for- 
eign corporations  licensed  in  New  York. 

There  is  no  doubt  that  the  Secretary  of  State  may  re- 
fuse to  file  a  name  which  in  his  opinion  falls  within  the  pro- 


CERTIFICATE    OF    INCORPORATION.  29 

hibition  of  the  statute.  In  case  of  a  wrongful  refusal,  "there 
may  be  no  adequate  remedy  to  the  persons  or  corporations 
claiming  to  be  aggrieved,  other  than  by  a  review  of  such  de- 
termination by  writ  of  certiorari."  Columbia  Co.  v.  O'Brien, 
loi  App.  Div.  296  (1905);  People  ex  rel  Trustees  v.  Bd. 
Suprs.,  131  N.  Y.  468  (1892).  Where  on  the  other  hand  a 
name  is  improperly  allowed,  equity  will  grant  relief  to  those 
injured,  by  injunction. 

"Whether  the  court  will  interfere  in  a  particular  case 
must  depend  upon  circumstances,  the  identity  of  the  business 
of  the  respective  corporations;  how  far  the  name  is  a  true 
description  of  the  kind  and  quality  of  the  articles  manu- 
factured or  the  business  carried  on ;  the  extent  of  the  business 
carried  on;  the  extent  of  the  confusion  which  may  be  created 
or  apprehended  and  other  circumstances  which  might  justly 
influence  the  judgment  of  the  judge  in  granting  or  withhold- 
ing the  remedy."  C.  S.  Higgins  Co.  v.  Higgins  Soap  Co., 
supra. 

"Courts  of  equity  must,  in  such  cases,  assume  that  the 
public  will  use  reasonable  intelligence  and  discrimination  with 
reference  to  the  names  of  corporations  with  which  they  deal. 
*  *  *  It  is  timely  enough  in  such  cases  for  equity  to  use 
its  extraordinary  powers  when  it  appears  that  deception  or 
confusion  has  in  fact  resulted  from  the  use  of  a  word  or  a 
name  or  when  it  clearly  appears  that  such  result  is  likely  to 
follow."  Hygeia  Water  Ice  Co.  v.  The  N.  Y.  Hygeia  Ice  Co., 
Ltd.,  140  N.  Y.  94,  98  (I893).1 

The  corporate  name  may  be  changed  by  amendment. 
The  procedure  is,  however,  peculiar  and  complicated,  involv- 
ing application  to  the  courts.  (See  §  72.) 

1  See  also  Employers  Assurance  Corp.  v.  Employers  Insurance  Co.  of 
U.  S.,  24  Abb.  N.  C.  368  (1890);  Commercial  Union  Assur.  Co.  v.  Smith, 
2  N.  Y.  Supp.  296  (1888);  Colonial  Dames  of  America  v.  C.  D.  of  N.  Y., 
29  Misc.  10  (1899).  For  case  protecting  an  individual  in  the  use  of  his 
own  name,  see  De  Long  v.  De  Long  Hook  &  Eye  Co.,  7  App.  Div.  33  (1896); 
Meneely  v.  Meneely,  62  N.  Y.  427  (1875). 


3O  NEW   YORK   CORPORATIONS. 

§  19.     (2)  Corporate  Purposes. 

"The  purpose  or  purposes  for  which  it  is  to  be  formed." 
(B.  C.  L.,  §  2,  subdiv.  2.) 

Corporations  are  creatures  of  the  legislature  and  the 
purposes  of  their  formation  are,  therefore,  legal  only  if  author- 
ized by  statute.  Thomas  v.  Company,  101  U.  S.  71. 

New  York,  in  accord  with  the  tendency  of  the  more  ad- 
vanced states,  is  very  liberal  in  this  respect,  the  Business  Cor- 
porations Law  (§2)  authorizing  the  formation  of  corpora- 
tions for  "  any  lawful  business  purpose  or  purposes  other  than 
a  moneyed  corporation  or  a  corporation  provided  for  by  the 
banking,  insurance,  the  railroad  and  the  transportation  cor- 
poration laws." 

Under  this  clause  it  is  possible  to  secure  as  wide  a  field 
of -operation  for  a  corporation  as  is  open  to  individuals  or 
partnerships.  Any  lawful  purpose,  within  the  prescribed 
limits,  and  any  number  of  such  purposes  may  be  included  in 
a  single  charter. 

The  charter  purposes  should  be  drawn  with  the  greatest 
possible  care,  for  a  clumsily  inserted  limitation  upon  corporate 
powers  or  a  careless  omission  may  prove  a  troublesome  obsta- 
cle, removable  only  by  amendment.  Personal  considerations, 
business  interests  and  the  attraction  of  possible  subscribers  to 
stock  usually  determine  the  framing  of  the  purpose  clause. 

Technically,  a  corporation  is  confined  strictly  within  the 
limit  of  its  charter  powers.  It  must  be  noted,  however,  that 
this  doctrine  has  been  greatly  modified  in  this  state.  In  prac- 
tice a  corporation  in  New  York  may  perform  any  act  necessary 
to  or  desirable  for  its  interests,  regardless  of  the  limitations 
of  its  charter,  or  the  doctrine  of  ultra  vires,  if  such  act  is  not 
prejudicial  to  public  interests  or  to  the  rights  of  others.  As 
stated  by  Judge  Allen  in  Whitney  Arms  Co.  v.  Barlow,  63 
N.  Y.  62,  69  (1875)  :  "The  plea  of  ultra  vires  should  not  as 
a  general  rule  prevail,  whether  interposed  for  or  against  a 


CERTIFICATE    OF    INCORPORATION.  3! 

corporation,  when  it  would  not  advance  justice,  but  on  the 
contrary  would  accomplish  a  legal  wrong." 

In  later  cases  "public  interest"  seems  to  be  the  controll- 
ing consideration.  "In  the  granting  of  charters,  the  legisla- 
ture is  presumed  to  have  had  in  view  the  public  interest;  and 
public  policy  is  *  *  *  concerned  in  the  restriction  of 
corporations  within  chartered  limits,  and  a  departure  there- 
from is  only  deemed  excusable  when  it  cannot  result  in  preju- 
dice to  the  public  or  to  the  stockholders."  Leslie  v.  Lorillard, 
no  N.  Y.  519,  531  (I888).1  (See  §  73.) 

§  20.     (3)  Capital  Stock. 

"The  amount  of  the  capital  stock,  and  if  any  portion  be 
preferred  stock,  the  preferences  thereof."  (B.  C.  L.,  §  2, 
subdiv.  3.) 

The  amount  of  capital  stock  is  fixed  by  the  statement 
thereof  in  the  certificate  of  incorporation  and  may  only  be 
changed  thereafter  by  amendment.  No  maximum  limit  is 
prescribed.  Five  hundred  dollars  is  the  minimum  capitaliza- 
tion allowed  by  law.  (See  §  53.) 

The  conditions  of  issue  of  any  preferred  or  special  stock 
should  also  be  brought  in  under  this  clause  of  the  charter. 
Greater  privileges  may  be  given  to  one  class  than  to  another 
as  to  dividends  or  as  to  voting  power.  Wide  latitude  in  these 
matters  is  given  by  the  New  York  statutes  and  such  classifica- 
tion is  common  and  is  frequently  desirable.  The  stock  clause 
of  the  articles  of  incorporation  should  be  made  very  specific 
in  its  statement  of  any  such  preferences.  (See  §  76,  et  seq.} 

Preferred  or  special  stock  may  be  authorized  only  by 
charter  provision.  If  not  provided  for  in  the  original  charter, 
the  right,  if  desired,  must  be  secured  by  amendment,  adopted 
at  a  special  meeting  by  vote  of  the  holders  of  two-thirds  of 

»See  also  Bissell  v.  R.  R.,  22  N.  T.  258  (1860);  Holmes  v.  Wlllard, 
125  Id.  76  (1890);  People  v.  N.  R.  S.  R.  Co.,  121  Id.  582  (1890);  Llnkauf 
v.  Lombard,  137  Id.  417  (1893);  1  Cook  on  Corporations,  S  3. 


32  NEW    YORK    CORPORATIONS. 

the  capital  stock.  (S.  C.  L.,  §  47.)  (See  §  72.)  This  is  a 
statutory  change  of  the  rule  of  unanimous  consent  that  form- 
erly prevailed.  Kent  v.  Quicksilver  Mining  Co.,  78  N.  Y. 
159  (1879)  and  Campbell  v.  Zylonite  Co.,  122  N.  Y.  455 
(1890). 

§  21.     (4)  Shares.     Initial  Capital. 

"The  number  of  shares  of  which  the  capital  stock  shall 
consist,  each  of  which  shall  not  be  less  than  five  nor  more 
than  one  hundred  dollars,  and  the  amount  of  capital  not  less 
than  five  hundred  dollars,  with  which  said  corporation  will 
begin  business."  (B.  C.  L.,  §  2,  subdiv.  4.) 

A  "share  of  the  capital  stock  is  the  right  to  partake, 
according  to  the  amount  put  into  the  fund  (capital),  of  the 
surplus  profits  of  the  corporation;  and  ultimately  on  the  dis-' 
solution  of  it,  of  so  much  of  the  fund  thus  created  as  remains 
unimpaired  and  is  not  liable  for  debts  of  the  corporation." 
Burrall  v.  Bushwick  Ry.  Co.,  75  N.  Y.  211,  216  (1878); 
per  Folger,  J. 

There  is  no  statutory  requirement  that  the  par  value  of 
shares  of  a  corporation  shall  be  uniform  for  all  shares  and 
classes  of  stock,  but  such  is  usually  the  case.  Occasionally  a 
preferred  stock  is  issued  at  a  different  par  value  than  the 
common  stock,  but  this  is  exceptional.  Uniformity  is  the  rule 
established  both  by  custom  and  convenience.  (See  §  80.) 

The  amount  stated  in  the  certificate  of  incorporation  as 
the  capital  with  which  the  company  will  begin  business  may  be 
fixed  at  any  desired  amount  not  less  than  $500,  but  once  fixed, 
must  be  paid  in,  either  in  cash  or  property,  before  the  corpo- 
rate business  may  commence.  (B.  C.  L.,  §  3.)  As  this 
amount  may  not  be  less  than  $500  it  follows  that  that  is  the 
minimum  corporate  .capitalization  allowed  in  New  York. 
(See  §74.) 


CERTIFICATE    OF    INCORPORATION.  33 

§  22.     (5)  Location. 

"The  city,  village  or  town  in  which  its  principal  business 
office  is  to  be  located."  (B.  C.  L.,  §  2,  subdiv.  5.) 

The  principal  office  or  place  of  business  of  the  corpora- 
tion must  be  within  the  state.  Its  location  need  not  appear 
specifically  in  the  certificate.  It  is  sufficient  if  the  city,  village 
or  town  is  given.  If  in  the  City  of  New  York,  the  borough 
must  be  included.  (B.  C.  L.,  §2.)  (See  §  134.) 

The  omission  to  require  a  definite  statement  of  the  cor- 
porate address  is  a  defect  of  the  New  York  statutes.  The 
exact  location  of  the  principal  office  of  a  corporation  should 
be  a  matter  of  public  record. 

§  23.     (6)  Duration. 

"Its  duration."  (B.  C.  L.,  §  2,  subdiv.  6.) 
The  duration  of  corporate  existence  in  New  York  may 
be  perpetual,  and  it  is  usually  so  stated  in  the  certificate.  It 
may  be  limited,  if  desired,  to  any  term,  and  such  limited 
period  may  be  extended  by  charter  amendment  at  any  time 
prior  to  its  termination.  (See  §  72.)  A  restriction  of  fifty 
years  is  imposed  on  the  life  of  companies  formed  by  the  con- 
solidation of  existing  corporations.  (B.  C.  L.,  §  8.)  (See 
Ch.  VI,  "Corporate  Existence.") 

§  24.     (7)  Number  of  Directors.     (8)  Names. 

"The  number  of  its  directors,  not  less  than  three."  (B. 
C.  L.,  §  2,  subdiv.  7.) 

"The  -names  and  post-office  addresses  of  the  directors  for 
the  first  year."  (Id.,  subdiv.  8.) 

The  directors  for  the  first  year  are  designated  by  the 
charter,  not  elected  by  the  stockholders.  They  hold  office,  not 
necessarily  for  a  year,  but  until  the  first  annual  meeting,  or, 
if  directors  are  not  elected  at  that  meeting,  thereafter  until 


34  NEW   YORK   CORPORATIONS. 

their  successors  are  elected.  The  board  of  directors  must  have 
not  less  than  three  members,  but  may  be  composed  of  any 
larger  number  desired.  Formerly  the  maximum  number  al- 
lowed was  thirteen,  but  this  limitation  was  removed  in  1901. 
The  names  and  addresses  of  the  directors  who  are  to 
serve  for  the  first  year  must  be  given.  One  director  must  be 
a  resident  of  the  state.  (G.  C.  L.,  §  29.)  Unless  the  certifi- 
cate or  by-laws  provide  otherwise,  directors  must  be  stock- 
holders. (S.  C.  L.,  §  20.)  Since,  however,  the  first  directors 
are  designated  by  the  charter  and  become  directors  "by  direct 
command  of  the  statute  and  not  through  election  by  the 
stockholders,"  they  need  not  be  stockholders.  "In  the  nature 
of  things  there  can  be  no  stockholders  at  the  date  of  incorpora- 
tion." Hamilton  Trust  Co.  v.  Clemes,  163  N.  Y.  423,  426 
(1900).  (See  §  117.) 

§  25.     (9)  Subscribers. 

"The  names  and  post-office  addresses  of  the  subscribers 
to  the  certificate  and  a  statement  of  the  number  of  shares  of 
stock  which  each  agrees  to  take  in  the  corporation."  (B.  C. 
L.,  §  2,  subdiv.  9.) 

Either  business  or  residence  addresses  may  be  given. 
One  share  of  stock  is  a  sufficient  subscription  to  satisfy  the 
requirements  of  the  statutes.  All  of  the  incorporators  named 
in  the  certificate  must  be  subscribers  to  the  stock  of  the  cor- 
poration and  must  sign  and  acknowledge  the  certificate  of 
incorporation.  (See  §  27.) 

§  26.     (10)  Special  Provisions. 

"The  certificate  may  contain  any  other  provisions  for  the 
regulation  of  the  business  and  the  conduct  of  the  affairs  of  the 
corporation,  and  any  limitation  upon  its  powers  and  upon  the 
powers  of  its  directors  and  stockholders  which  does  not  ex- 


CERTIFICATE   OF   INCORPORATION.  35 

empt  them  from  any  obligation  or  from  the  performance  of 
any  duty  imposed  by  law."  (B.  C.  L.,  §  2;  G.  C.  L.,  §  10.) 

Under  the  broad  language  of  this  clause,  any  lawful 
scheme  of  internal  management  from  the  simplest  to  the  most 
complex  may  be  incorporated  in  the  charter.  Common  pro- 
visions are  those  giving  stockholders  power  to  remove  direc- 
tors ;  securing  to  the  corporation  the  right  to  hold  and  dispose 
of  the  stock  of  other  corporations;  giving  the  company  a  lien 
on  the  stock  of  a  member  indebted  to  it ;  regulating  the  amount 
of  working  capital  and  the  manner  of  declaring  dividends; 
limiting  the  right  to  vote;  providing  for  cumulative  voting, 
for  committees  of  directors  and  for  classification  of  the  board 
of  directors. 

It  is  to  be  noted  that  if  it  is  desired  to  restrict  meetings 
of  the  directors  to  the  state,  a  specific  provision  to  that  effect 
must  be  inserted  in  the  certificate  (B.  C.  L.,  §  2),  and  if  the 
directors  are  not  to  have  the  statutory  power  of  adopting 
by-laws,  its  prohibition  must  also  be  included  in  the  charter. 
(G.  C.  L.,  §  29.) 

Most  of  the  provisions  mentioned  might  be  included  in 
the  by-laws,  but  the  greater  stability  of  the  charter  makes  it 
advisable  to  prescribe  any  desired  limitations  of  importance 
in  that  instrument. 

§  27.     Execution  of  Certificate. 

The  certificate  of  incorporation  should  be  signed,  in  trip- 
licate, by  each  of  the  incorporators  and  acknowledged,  in 
duplicate,  before  a  notary  public,  commissioner  of  deeds  or  a 
justice  of  the  peace.  In  another  state  or  country,  the  certifi- 
cate must  be  acknowledged  before  a  commissioner  of  deeds 
for  New  York  State  or  any  local  officer  authorized  to  take 
acknowledgments  of  deeds.  In  the  latter  case  the  officer's 
authority  should  be  proved  by  proper  official  certificate.  (  See 
Form  5  and  notes  thereon.) 


36  NEW    YORK    CORPORATIONS. 

If  there  are  but  three  incorporators  and  they  come  to- 
gether for  the  signing  and  acknowledgment  of  the  instrument, 
the  formality  is  a  simple  one.  The  three  acknowledgments 
are  taken  at  the  one  time,  and  one  notarial  certificate  serves 
for  all.  If  the  notarial  officer  who  acts  in  the  matter  calls  on 
the  incorporators  at  their  offices  or  residences  and  takes  their 
several  acknowledgments,  the  one  notarial  certificate  will  still 
serve.  If,  however,  the  incorporators  are  numerous,  live  in 
other  states,  or  for  any  other  reason  cannot  be  easily  reached 
or  assembled,  the  matter  is  more  troublesome.  Separate  no- 
tarial certificates  are  then  usually  necessary  for  each  acknowl- 
edgment. 

§  28.     Filing  and  Recording.     State. 

The  duly  executed  certificate  of  incorporation  is  sent  to 
the  Secretary  of  State,  together  with  the  proper  fees.  (G.  C. 
L.,  §  5;  L.  1892,  Ch.  683.)  (See  §  10.) 

At  the  same  time  the  organization  tax  must  be  sent  to  the 
State  Treasurer  who  notifies  the  Secretary  of  State  that  such 
tax  has  been  received.  If  the  certificate  of  incorporation  is 
in  due  and  acceptable  form,  the  latter  official  notifies  the  State 
Treasurer  that  such  is  the  case  and  files  and  records  the  instru- 
ment. He  then  sends  notice  of  the  receipt  and  filing  of  the 
certificate  to  the  party  from  whom  it  was  received,  and  the 
State  Treasurer  also  sends  his  receipt  for  the  organization  tax. 
The  Secretary  of  State  cannot  file  the  certificate  until  the 
organization  tax  has  been  paid  and  he  has  been  formally  noti- 
fied thereof.  (Tax  Law,  §  180.) 

The  Secretary  of  State  sends  notice  of  the  receipt  and 
due  record  of  all  charters  filed  in  his  office,  but  does  not  send 
a  copy  of  the  charter  unless  it  is  requested  and  his  fees  there- 
for are  paid.  For  certified  copies  these  are  15  cents  a  folio  and 
$i  for  seal.  (See  "Table  of  Fees,"  page  347.)  Such  certified 
copy — or  any  copy — is  not  in  any  way  necessary  to  the  legality 


CERTIFICATE   OF   INCORPORATION.  37 

of  the  incorporation,  but  it  affords  a  recognized  and  con- 
venient evidence  of  incorporation  and  is  therefore  at  times 
desirable.  (G.  C.  L.,  §  9.) 

Frequently  a  signed  copy  of  the  certificate  of  incorpora- 
tion is  sent  at  the  same  time  as  the  original,  to  the  Secretary 
of  State  for  certification  in  order  that  the  corporation  may 
have  a  certified  office  copy.  The  fees  are  the  same  as  before, 
the  only  advantages  secured  being  the  exact  duplication  of  the 
original  charter  and  the  convenience  of  the  plan  to  all  parties 
concerned.  (See  §§  n,  12.) 

§  29.     Filing  and  Recording.     Local. 

As  soon  as  the  Secretary  of  State's  notification  of  filing 
and  the  Treasurer's  receipt  for  organization  tax  are  received, 
the  duplicate  copy — signed  and  acknowledged  exactly  as  was 
the  original  and  with  the  receipt  for  organization  tax  from  the 
State  Treasurer  attached — must  be  filed  in  the  office  of  the 
county  clerk  in  the  place  where  the  corporation  has  its  princi- 
pal office.  (G.  C.  L.,  §  5.)  The  county  clerk  is. not  permitted 
to  file  the  certificate  unless  it  is  accompanied  by  the  Treasu- 
rer's receipt  for  organization  tax.  (Tax  Law,  §  180.) 

If  desired,  a  copy  of  the  original  charter,  certified  by  the 
Secretary  of  State,  may  be  filed  in  the  office  of  the  county 
clerk  instead  of  a  duplicate  original.  (G.  C.  L.,  §  5.)  The 
duplicate  original  is,  however,  usually  more  convenient  and 
less  expensive.  (See  "Table  of  Fees,"  page  347.) 

§  30.     Allowance. 

It  is  to  be  noted  that  the  application  to  the  state  authori- 
ties for  a  charter  is  nothing  more  nor  less  than  a  copy  of  the 
desired  charter.  No  petition  or  other  application  of  any  kind 
need  accompany  it.  If  in  due  form  it  is  usually  allowed  by 
the  Secretary  of  State  as  a  matter  of  course  and  the  instru- 


38  NEW    YORK    CORPORATIONS. 

ment  then  becomes  the  charter  of  the  corporation  which  it 
creates. 

If  the  charter  does  not  meet  with  the  approval  of  the 
Secretary  of  State,  it  is  returned  to  the  applicants  with  a 
statement  of  the  reasons  for  its  refusal.  If  such  refusal  is  on 
insufficient  grounds  and  the  matter  is  of  material  importance, 
the  Secretary  of  State  may  be  compelled  by  mandamus  to  file 
the  certificate.  People  ex  rel  Eickemeyer  Field  Co.,  138  N. 
Y.  614  (1893).  But  see  People  ex  rel  Davenport  v.  Rice, 
22  N.  Y.  Supp.  631  (1893). 

"Generally,  however,  the  importance  of  the  matter  will 
not  justify  such  proceedings,  and,  if  the  official  ruling  cannot 
be  changed,  the  purposes  or  other  matters  in  question  must 
be  either  omitted  or  so  changed  as  to  meet  the  views  of  the 
authorities. 

"If  any  required  alteration  in  an  executed  charter  is  on 
some  non-essential  point,  and  all  the  incorporators  agree  there- 
to, it  is  not  usually  necessary  to  redraft  and  reexecute  the 
entire  instrument.  The  correction  may  be  made  in  the  origi- 
nal instrument  and  the  document  be  then  returned  for  accept- 
ance in  its  corrected  form. 

"If,  however,  the  alteration  be  material,  the  better  prac- 
tice is  to  have  the  instrument  redrawn  and  executed  afresh 
by  the  incorporators.  If,  however,  a  material  alteration  were 
made  in  the  instrument  without  any  reexecution,  but  with  the 
consent  or  subsequent  acceptance  of  the  incorporators,  and 
the  charter  so  altered  were  duly  allowed  and  filed  by  the  state 
officials,  it  is  not  probable  that  it  could  later  be  successfully 
attacked."  (Conyngton  on  Corporate  Organization,  p.  135.) 

An  injunction  restraining  the  Secretary  of  State  from 
filing  an  improper  certificate  may  be  obtained  at  a  general 
term  of  the  Supreme  Court  in  the  third  judicial  department 
upon  notice.  (Code  Civ.  Pro.,  §  605.)  Matter  of  Comstock, 
25  State  Rep.  611  (1889). 


CHAPTER  IV. 


BY-LAWS. 


§  31.     Preparation. 

By-laws  are  the  permanent  rules  for  the  regulation  of  the 
corporate  affairs,  ranking  next  to  the  charter  in  authority, 
importance  and  permanence.  They  should  be  carefully  pre- 
pared, and  if  a  model  set  is  used  it  should  be  thoroughly  re- 
vised to  meet  the  needs  of  the  particular  corporation.  The 
routine  detail  of  corporate  procedure  should  be  included  and 
any  other  provisions  which,  while  necessary,  are  not  of  suffi- 
cient permanence  or  importance  to  justify  inclusion  in  the 
charter. 

It  is  usual  and  good  practice  to  repeat  in  the  by-laws 
any  details  of  management  that  have  already  been  included 
in  the  charter  or  which  are  prescribed  by  the  statutes.  When 
this  is  done  the  by-laws  provide  a  compact  and  convenient 
manual  of  procedure  for  the  corporate  officials,  obviating  fre- 
quent references  to  the  charter  or  statutes.  The  usefulness 
of  the  by-laws  for  this  purpose  is  much  increased  by  the  adop- 
tion of  a  clear,  logical  classification  and  arrangement.  (See 
Forms  6  and  7.) 

The  New  York  statutes  expressly  permit  the  by-laws  to 
regulate  the  following  matters,  which  if  not  so  regulated  are 
controlled  either  by  statute  provision  or  the  common  law. 

39 


4O  NEW   YORK   CORPORATIONS. 

§  32.     (i)  Meetings  and  Elections. 

By-laws  may  fix  the  amount  of  stock  necessary  for  a 
quorum  at  meetings  other  than  those  for  the  election  of  direc- 
tors. (See  §  102.)  (G.  C.  L.,  §  n,  subdiv.  5.)  By-laws 
may  also  fix  the  time  and  place  of  meeting  for  the  annual 
election  of  directors.  The  statutes  require  two  weeks'  publish- 
ed notice  of  this  meeting  for  the  election  of  directors,  but 
the  by-laws  may  provide  for  additional  notice.  (S.  C.  L., 
§  20.)  Provision  may  be  made  for  classification  of  the  board, 
but  at  least  one-fourth  the  number  must  be  elected  annually. 
(Id.) 

The  manner  of  appointing  inspectors  of  elections  of  di- 
rectors, subsequent  to  the  first,  who  must  be  appointed  by  the 
board,  may  be  prescribed  (see  §  108),  (S.  C.  L.,  §  28),  as 
also  the  mode  of  filling  vacancies  in  the  office  of  inspector. 
(Id.)  By-laws  may  regulate  the  calling  of  special  meetings 
(G.  C.  L.,  §  n,  subdiv.  5),  other  than  for  the  election  of  direc- 
tors. (G.  C.  L.,  §  24.)  (See  §  101,  subdiv.  c.) 

§  33-     (2)  Directors. 

"By-laws  duly  adopted  at  a  meeting  of  the  members  of 
the  corporation  shall  control  the  action  of  its  directors."  (G. 
C.  L.,  §  n,  subdiv.  5;  also  §  39.) 

They  may  provide  that  directors  need  not  be  stockholders 
(S.  C.  L.,  §  20)  and  for  the  manner  of  filling  vacancies  in  the 
board.  (Id.)  Also  if  it  is  desired  that  directors  shall  not 
hold  meetings  outside  the  state  and  no  provision  to  that  effect 
has  been  inserted  in  the  charter,  it  may  be  included  in  the 
by-laws.  (See  §  I25a.) 

The  number  of  directors  necessary  for  a  quorum  of  the 
board  may  be  fixed  at  not  less  than  one-third  the  entire  num- 
ber (G.  C.  L.,  §  29),  and  more  than  a  majority  of  the  quorum 
may  be  required  to  validate  action  of  the  directors.  (G.  C.  L., 
§39.)  (See§i25c.) 


BY-LAWS.  41 

§  34-     (3)  Officers. 

By-laws  may  prescribe  the  powers  and  duties  of  officers 
and  agents.  (S.  C.  L.,  §  27.)  This  provision  is  very  sweep- 
ing, allowing  the  usual  duties  of  the  particular  officers  to  be 
varied  in  any  way  desired,  except  as  to  such  matters  as  are 
prescribed  by  statute.  (See  §  130.) 

§  35-     (4)  Capital  Stock. 

By-laws  should  regulate  the  mode  of  transfer  of  stock 
(S.  C.  L.,  §  40)  and  may  fix  a  period  of  not  over  forty  days 
prior  to  stockholders'  meeting  during  which  no  transfer  shall 
be  made  on  the  books  of  the  company.  (G.  C.  L.,  §  20.) 
They  may  prescribe  the  notice  for  meetings  to  vote  on  increase 
or  reduction  of  stock.  (S.  C.  L.,  §  45.)  (See  §§  81,  101, 
105-) 

§  36,     Adoption. 

The  adoption  of  by-laws  is  a  function  of  the  stockholders. 
In  New  York  they  have  this  power  (G.  C.  L.,  §§  n,  29),  but 
by  a  wise  provision  of  the  statutes,  directors  may  also  adopt 
by-laws,  provided  they  are  not  inconsistent  with  those  passed 
by  the  stockholders.  This  allows  the  directors  to  act  quickly 
in  an  emergency,  but  prevents  them  from  removing  any  re- 
striction on  their  actions  which  may  have  been  imposed  by 
the  stockholders,  or  from  making  any  material  modification 
of  the  scheme  of  management  already  in  force.  (See  §  119.) 

Directors'  by-laws  are  strictly  supplementary  to  those  of 
the  stockholders  and  are  subject  to  alteration  or  repeal  by 
these  latter.  Until  so  altered  or  amended  they  are  of  equal 
force  with  those  passed  by  the  stockholders.  (G.  C.  L.,  §  29.) 
No  by-law  adopted  by  the  directors,  regulating  the  election 
of  directors  or  officers,  is  valid  unless  published  for  at  least 
once  a  week  for  two  successive  weeks  (Wood  v.  Knapp,  100 
N.  Y.  109  [1885])  in  a  newspaper  in  the  county  where  the 


42  NEW   YORK   CORPORATIONS. 

election  is  to  be  held  and  at  least  thirty  days  before  such  elec- 
tion.    (G.  C.  L.,  §  n.) 

§  37.     General. 

A  by-law  must  be  reasonable  and  adapted  to  the  purposes 
of  the  corporation.  If  not  so  it  is  void.  People  v.  Medical 
Society  of  Erie,  24  Barb.  570,  575  (1857)  ;  Kent  v.  Quick- 
silver Mining  Co.,  78  N.  Y.  159,  (1879);  Cartan  v.  Father 
Matthew  United  B.  Society,  3  Daly  20  (1869).  An  action 
cannot  be  maintained,  however,  to  have  a  by-law  declared  void 
unless  the  plaintiff  can  show  that  its  enforcement  would  work 
him  irreparable  injury.  Thomas  v.  M.  M.  P.  Union,  121 
N.  Y.  45  (1890). 

By-laws  are  effective  as  to  third  persons  only  so  far  as 
these  latter  have  actual  knowledge  of  the  by-law  provisions. 
Rathburn  v.  Snow,  123  N.  Y.  343,  349  (1890)  ;  Oakes  y.  C. 
W.  Co.,  143  N.  Y.  430,  436  (1894). 

§  38.     Observance. 

By-laws  should  be  strictly  obeyed.  Any  breach  may  re- 
sult in  an  appeal  to  the  courts  by  an  aggrieved  stockholder  to 
invalidate  action  taken  thereunder  or  to  enforce  the  personal 
liability  that  may  be  incurred  by  the  offending  officer  or  direc- 
tor. Direct  penalties  for  breach  are  of  doubtful  utility.  They 
-are  difficult  of  enforcement  and  in  view  of  the  restraining 
influences  above  mentioned  are  usually  unnecessary. 

A  stockholder  wishing  to  object  to  an  irregularity  must 
do  so  promptly  or  he  will  be  estopped  by  his  delay. 

Outside  parties  injured  through  failure  on  the  part  of 
corporation  officials  to  obey  the  by-laws  may  secure  indemnity 
from  the  corporation.  Knox  v.  Eden  Musee,  74  Hun  483 

(1893). 


BY-LAWS.  43 

§  39.     Repeal. 

By-laws  are  always  subject  to  repeal  by  the  stockholders 
in  accordance  with  the  procedure  imposed  by  either  charter 
or  by-laws.  The  doctrine  of  vested  rights,  however,  some- 
times interferes.  "A  private  corporation  cannot  repeal  a  by- 
law so  as  to  impair  rights  which  have  been  given  and  become 
vested  by  virtue  of  the  by-law;  and  this  although  the  power 
is  reserved  by  its  charter  to  alter,  amend  or  repeal  its  by-laws." 
Kent  v.  Quicksilver  Mining  Co.,  78  N.  Y.  159  (1879). 

The  directors  may  repeal  by-laws  passed  by  them,  but 
may  not  repeal  the  by-laws  of  the  stockholders. 


CHAPTER  V. 
FIRST  MEETINGS. 


§  40.     First  Meeting  of  Stockholders. 

As  the  first  board  of  directors  is  named  in  the  charter, 
and  as  directors  have  power  to  pass  by-laws,  it  is  not  neces- 
sary that  the  stockholders  should  meet  for  organization.  Ac- 
ceptance of  charter  will  be  presumed  from  the  fact  of  applica- 
tion (Bank  of  the  U.  S.  v.  Dandridge,  12  Wheat.  64,  70 
[1827]),  and,  without  any  preliminary  action  on  the  part  of 
the  stockholders,  the  board  of  directors  may  meet,  adopt  by- 
laws and  elect  officers  at  once,  and  begin  active  operations 
as  soon  as  the  amount  of  capital  specified  in  the  charter  as 
that  with  which  the  corporation  will  begin  business,  has  been 
paid.  (G.  C.  L.,  §  29.) 

The  better  practice,  however,  is  to  hold  a  stockholders' 
meeting  for  organization.  This  meeting  must  be  held  within 
the  state  (Ormsby  v.  Vermont  Copper  Mining  Co.,  56  N.  Y. 
623  [1874]),  and  is  usually  assembled  as  soon  as  possi- 
ble after  the  charter  has  been  filed.  The  allowance  of  the 
charter  having  acted  as  an  acceptance  of  the  incorporators' 
subscriptions,  they  are  stockholders  of  the  company  and  are 
therefore  entitled  to  take  part  in  this  meeting  either  in  person 
or  by  proxy.  (See  §  81.) 

§  41.     Notice  of  Stockholders'   Meeting. 

The  only  methods  of  assembling  the  first  meeting  are  by 
unanimous  waiver  of  notice,  or  under  the  general  provision 

44 


FIRST  MEETINGS.  45 

(G.  C.  L.,  §  39),  that  where  no  provision  for  notice  of  special 
meetings  is  contained  in  the  by-laws,  such  meeting  may  be 
called  in  the  manner  provided  for  the  annual  meeting.  Tjiis 
involves  publication  of  notice  once  in  each  week  for  two  weeks 
immediately  preceding  such  meeting,  in  a  newspaper  published 
in  the  county  where  such  meeting  is  to  be  held.  (S.  C.  L., 
§  20.)  Such  notice  should  be  signed  or  authorized  by  a  ma- 
jority of  the  incorporators. 

The  best  practice  is  to  prepare  a  written  call  and  waiver 
of  notice  giving  the  day  and  hour  and  place  of  the  meeting 
and  a  statement  of  the  business  to  be  transacted  ("any  and 
all  business  brought  before  the  meeting"  is  sufficient),  and 
secure  the  signatures  of  all  the  incorporators  to  this  instru- 
ment. (See  Form  10.)  If  this  plan  cannot  be  followed,  or 
the  presence  and  participation  of  all  the  incorporators  at  the 
meeting,  which  would  have  the  effect  of  a  waiver  of  notice, 
cannot  be  secured,  the  meeting  must  be  assembled  by  publi- 
cation. (See  Form  18.) 

§  42.     Minutes  of  Stockholders'   Meeting. 

As  a  rule  the  first  meeting  of  stockholders  is  purely 
formal,  every  important  action  having  already  been  agreed 
upon.  It  is  a  common  practice  to  prepare  the  minutes  in 
advance  of  the  meeting  and  to  follow  them  as  closely  as 
possible.  At  times  these  prepared  minutes  are  merely  read 
to  the  assembled  incorporators,  and,  in  the  absence  of  dissent, 
are  taken  as  the  record  of  the  proceedings  of  the  meeting 
without  formal  action.  At  other  times  the  minutes  after  their 
reading  will  be  adopted  "as  read." 

These  methods,  though  legal,  are  informal  and  irregular. 
The  better  practice  is  to  use  the  prepared  minutes  as  a  guide 
to  avoid  omissions  and  to  insure  the  due  and  proper  considera- 
tion of  necessary  matters.  All  important  actions  required  are 
actually  taken  by  the  meeting  and  the  minutes  become  in  fact 
a  record  of  its  proceedings. 


46  NEW    YORK    CORPORATIONS. 

§  43.     Organization  of  Stockholders'   Meeting. 

A  majority  of  the  stock  subscribed  for  in  the  charter  is 
required  to  constitute  a  quorum.  If  this  majority  is  present 
at  the  first  meeting,  the  legality  of  the  assemblage  should  then 
be  determined  by  an  examination  of  the  call  and  waiver, 
which,  if  found  correct  in  form  and  signed  by  every  incorpora- 
tor,  should  be  ordered  entered  on  the  minutes,  either  by  motion 
or  by  direction  of  the  presiding  officer.  All  other  matters 
affecting  the  regularity  of  the  meeting,  viz. :  the  names  of 
those  in  attendance,  the  statement  that  a  quorum  was  present, 
and  the  list  of  proxies,  if  any,  should  also  be  spread  upon  the 
record. 

The  presence  of  the  stockholders  at  this  first  meeting  may 
be  either  in  person  or  by  proxy  as  at  any  other  stockholders' 
meeting.  (See  §  104.) 

§  44.     Acceptance  of  Charter. 

The  next  step  usually  taken  is  the  formal  acceptance  of 
the  charter  and  an  order  for  its  entry  in  the  minute  book.  The 
acceptance  of  the  charter  is  not  strictly  necessary  since  a  cer- 
tificate of  incorporation  drawn  in  the  form  required  in  this 
state  is  itself  an  acceptance  of  the  terms  of  the  offer  made  by 
the  general  act.  Fire  Dept.  of  N.  Y.  v.  Kip,  10  Wend.  266 
(1833).  The  entry  of  the  charter  in  the  minute  book  as  part 
of  the  record  is  merely  a  matter  of  convenience  and  good 
practice.  It  is  usually  entered  on  the  first  pages  of  the  minute 
book.  (See  Form  15.) 

§45.     By-Laws.     Stockholders'. 

The  next  step  taken  should  be  the  adoption  of  by-laws. 
Usually  the  by-laws  are  prepared  in  their  entirety  in  advance 
and  are  adopted  at  the  first  meeting,  as  presented,  without 
change  or  comment.  In  the  purely  perfunctory  meetings 


FIRST  MEETINGS.  47 

sometimes  held,  they  are  not  even  read.  The  safest  plan, 
however,  is  to  have  them  read  and  adopted,  article  by  article, 
and  then  as  a  whole,  thus  preventing  mistakes  or  unauthorized 
substitutions  and  reducing  the  chances  of  subsequent  dis- 
agreement as  to  their  contents.  (See  Ch.  IV,  "By-Laws.") 

§  46.     Exchange    of    Stock    for    Property.     Stockholders' 
Action. 

Where,  as  is  very  frequently  the  case,  stock  is  to  be  issued 
in  large  amounts  in  exchange  for  property,  it  is  wise  to  have 
the  transaction  approved  at  the  first  meeting  of  stockholders. 
It  is  the  province  of  the  directors  to  authorize  such  a  trans- 
action, but  the  stockholders'  approval  acts  to  prevent  any  sub- 
sequent objection  on  the  part  of  dissenting  stockholders,  and 
is  therefore  usually  advisable.  When  this  action  is  taken  the 
stockholders  adopt  a  resolution  approving  the  exchange  and 
instructing  the  directors  to  effect  the  same.  (See  Forms  12 
and  13;  also  §  84.) 

§  47.     Other  Business.     Stockholders'  Meeting. 

The  consideration  of  the  exchange  of  stock  for  property 
usually  concludes  the  business  to  be  transacted  at  the  first 
meeting  of  stockholders.  If  the  by-laws  provide  for  a  perma- 
nent chairman  and  secretary  to  act  at  stockholders'  meetings, 
such  officers  would  properly  be  elected  immediately  after  the 
adoption  of  the  by-laws,  and  if  present,  might,  with  propriety, 
take  charge  of  the  meeting  at  once. 

The  adjournment  of  the  first  meeting  in  New  York  is 
usually  sine  die. 

§  48.     First  Meeting  of  Directors. 

The  directors'  first  meeting  may  be  held  before  or  after 
that  of  the  stockholders,  though  in  practice  it  almost  invariably 
follows.  This  first  meeting  of  the  directors  is  merely  a  special 


48  NEW   YORK   CORPORATIONS. 

meeting  and  if  held  subsequent  to  the  adoption  of  by-laws, 
must  be  called  in  accordance  with  the  provisions  there  made 
for  special  meetings.  The  usual  procedure  is,  however,  the 
same  as  in  the  case  of  the  organization  meeting  of  the  stock- 
holders, viz. :  written  call  and  waiver  of  notice  signed  by  all 
the  directors.  (See  Form  n.)  This  method  of  assembling 
a  meeting  is  always  allowable  unless  specifically  prohibited  by 
charter  or  by-laws.  The  call  customarily,  though  not  neces- 
sarily, specifies  the  purposes  of  the  meeting.  In  the  absence 
of  such  statement  it  will  be  assumed  that  the  meeting  is  called 
to  consider  whatever  matters  come  before  it.  Matter  of  Argus 
Co.  v.  Manning,  138  N.  Y.  557,  578  (1893).  (See  §  125!).) 
Unless  the  charter  or  by-laws  provide  to  the  contrary,  the 
meeting  may  be  held  without  the  state.  The  first  directors' 
meeting  is,  as  a  rule,  of  the  same  formal,  and  sometimes  per- 
functory character  as  that  of  the  stockholders.  Minutes  may 
and  frequently  are  prepared  beforehand,  especially  where  there 
are  dummy  directors.  (See  Form  16.) 

§  49.     Organization  of  Directors'  Meeting. 

The  directors'  meeting  is  organized  by  the  selection  of  a 
temporary  chairman  and  secretary.  If  a  quorum  is  present, 
proof  of  the  legality  of  the  meeting  is  presented  and  passed 
upon,  if  necessary,  by-laws  are  adopted,  and  the  election  of 
officers  is  in  order.  If  these  are  agreed  upon,  it  is  convenient 
to  instruct  the  secretary  to  cast  one  ballot  for  them  all.  Other- 
wise election  should  be  by  ballot  in  the  usual  manner.  The 
president  must  be  elected  from  the  board  itself.  A  secretary 
and  treasurer  and  such  other  officers  and  agents  as  the  by-laws 
prescribe,  or  the  directors  deem  necessary,  should  be  provided 
for.  Their  salaries  should  be  fixed  at  the  time  of  election,  or 
if  no  salaries  are  to  be  paid,  that  should  be  specified.  The  new 
officers,  if  present,  take  charge  at  once. 

The  power  to  appoint  necessary  officers  and  agents  has 


FIRST  MEETINGS.  49 

been  held  to  include  the  delegation  of  the  powers  of  the  board 
during  the  intervals  between  its  sittings  to  an  executive  com- 
mittee. Olcott  v.  Tioga  Ry.  Co.,  27  N.  Y.  546,  558  (1863). 
Where  the  board  is  numerous  and  composed  of  persons  with 
large  outside  interests  it  is  often  advisable  to  make  such  provi- 
sion to  secure  proper  supervision  of  corporate  affairs.  It  is 
common  to  appoint  at  the  same  time  a  finance  committee  to 
facilitate  the  efficient  management  of  the  corporate  funds. 
The  powers  of  such  committees  should  be  carefully  prescribed 
in  the  by-laws,  as  otherwise  abuse  of  authority  is  possible  and 
not  uncommon. 

§  50.     Issue  of  Stock  for  Property. 

After  the  election  of  officers,  the  matter  of  exchanging 
stock  for  property  may  be  conveniently  considered.  The  pro- 
posal for  the  exchange  is  presented,  and,  if  the  transaction 
has  been  approved  by  the  stockholders  as  suggested  above  (see 
§46),  their  resolution  is  also  placed  before  the  board.  .A 
resolution  is  then  usually  adopted  accepting  the  proposition 
for  the  exchange  and  authorizing  the  proper  officers  to  receive 
due  transfer  of  the  property  and  issue  stock  in  exchange  as 
agreed.  (See  Forms  12  to  14.) 

§  51.     Miscellaneous  Business.     Directors'   Meeting. 

Other  business  which  is  usually  transacted  at  this  first 
meeting  of  the  board,  is  the  adoption  of  a  form  of  stock  cer- 
tificate, the  selection  of  offices,  the  designation  of  a  bank  for 
deposit  of  corporate  funds,  the  auditing  and  approval  of  the 
bills  for  the  expenses  of  incorporation,  approval  of  official 
bonds  and  any  other  matters  which  are  preliminary  to  the 
proper  organization  for  business.  If  it  is  impossible  to  finish 
the  necessary  business  at  this  meeting,  or  another  meeting 
prior  to  the  next  regular  directors'  meeting  is  thought  advisa- 
ble, adjournment  is  taken  to  a  definite  date,  thus  saving  the 
trouble  of  calling  a  special  meeting. 


CHAPTER  VI. 
CORPORATE  EXISTENCE. 


§  52.     When  Commenced. 

It  is  now  well  settled  by  an  unassailable  line  of  decisions 
that  the  charter  of  a  private  corporation  is  a  contract  between 
the  incorporators  and  the  state.  Trustees  of  Dartmouth  Col- 
lege v.  Woodward,  4  Wheat.  518  (1819)  ;  People  v.  O'Brien, 
in  N.  Y.  i,  49  (1888).  (See  §  15.)  That  being  the  case, 
a  corporation  can  come  into  existence  only  when  a  binding 
contract  has  been  concluded.  The  New  York  Business  Cor- 
porations Law  is  worded  as  an  offer :  "Three  or  more  persons 
may  become  a  stock  corporation  *  *  *  by  making,  signing, 
acknowledging  and  filing  a  certificate,  etc."  (B.  C.  L.,  §  2.) 
The  acceptance  of  this  offer  is  complete  with  the  filing  of  the 
certificate  by  the  Secretary  of  State,  and  therefore  corporate 
existence  dates  from  that  time.  (B.  C.  L.,  §  2.) 

The  filing  of  the  certificate  in  the  office  of  the  county 
clerk  is  also  required  by  the  statute,  but  this  is  not  a  prerequi- 
site to  or  an  essential  of  corporate  existence.  Such  filing  must 
be  made,  but  only  as  a  statutory  requirement,  not  as  a  neces- 
sary preliminary  of  corporate  existence. 

If  incorporation  is  by  private  act,  the  same  rules  apply, 
the  conclusion  of  the  contract  marking  the  starting  point  of 
corporate  being. 

§  53.     Beginning  Business. 

No  stock  corporation  "shall  incur  any  debts  until  the 
amount  of  capital  specified  in  its  certificate  of  incorpora- 

50 


CORPORATE  EXISTENCE.  5 1 

tion  as  the  amount  with  which  it  will  begin  business  (not  less 
than  $500;  B.  C.  L.,  §  2)  shall  have  been  paid  in  in  money 
or  property."  (B.  C.  L.,  §  3.)  The  intent  of  this  provision 
is  to  require  payment  of  the  amount  specified  before  the  cor- 
poration may  begin  business. 

On  the  other  hand  the  corporation  must  not  remain  dor- 
mant indefinitely.  "If  any  corporation,  except  a  railroad, 
turnpike,  plank-road  or  bridge  corporation,  shall  not  organize 
and  commence  the  transaction  of  its  business  or  undertake  the 
discharge  of  its  corporate  duties  within  two  years  from  the 
date  of  its  incorporation  its  corporate  powers  shall  cease." 
(G.  C.  L.,  §31.) 

Under  this  provision  the  initial  payment  required  by  the 
charter  must  be  made  and  the  corporate  operations  commenced 
within  two  years  from  the  date  the  certificate  is  filed,  or  the 
corporation  may  be  dissolved,  the  Court  of  Appeals  having 
decided  that  "shall  cease"  means  "shall  cease  only  if  proper 
judicial  proceedings  are  instituted  by  the  state  to  secure  for- 
feiture ojf  the  charter."  Matter  of  N.  Y.  &  L.  Id.  Bridge  Co. 
v.  Smith,  148  N.  Y.  540  (1896). 

As  has  already  been  pointed  out,  the  corporation  comes 
into  existence  with  a  fully  equipped  board  of  directors,  who 
are  empowered  to  adopt  by-laws  for  the  regulation  of  the  cor- 
porate operations,  elect  officers,  and  begin  business  as  soon  as 
the  required  amount  of  capital  has  been  paid  into  the  treasury. 

5  54-     Renewal. 

Usually  the  period  of  existence  of  New  York  corpora- 
tions is  made  perpetual  and  the  question  of  renewal  does  not 
arise.  Where,  however,  the  original  charter  has  limited  the 
term  of  corporate  existence,  it  is  sometimes  found  desirable 
to  extend  this  period  or  to  make  the  corporate  existence  per- 
petual. This  may  be  accomplished  at  any  time  before  expira- 
tion of  the  charter  period,  by  written  consent  of  two-thirds 


52  NEW    YORK    CORPORATIONS. 

in  interest  of  the  stock,  in  which  event  no  meeting  is  required, 
or  by  a  two-thirds  vote  in  interest  cast  at  a  special  meeting 
of  the  stockholders  called  on  the  same  notice  as  is  required 
for  the  annual  meeting  (see  §  101,  -subdiv.  b),  such  action  to 
be  followed  by  the  preparation  of  a  certificate  under  the  cor- 
porate seal,  setting  forth  the  consent  or  vote  and  the  extension 
desired.  This  certificate  must  be  signed  and  acknowledged 
by  the  president  or  a  vice-president,  and  the  secretary  or  an 
assistant  secretary,  and  be  filed  with  the  Secretary  of  State. 
A  duplicate  original  or  a  copy  certified  by  the  Secretary  of 
State  must  also  be  filed  with  the  clerk  of  the  county  where  the 
corporation  has  its  principal  place  of  business.  (See  §  72.) 
(G.  C.  L.,  §  32.)  (For  fees,  see  "Table  of  Fees,"  page  347.) 
Any  corporation  may,  if  desired,  provide  in  its  charter 
that  it  shall  require  a  larger  vote  than  two-thirds  to  secure  an 
extended  term. 

§  55.     Forfeiture  of  Charter. 

It  follows  as  a  corollary  to  the  proposition  that  a  charter 
is  a  contract  between  the  corporation  and  the  state,  that  if 
the  corporation  is  guilty  of  a  breach  of  the  charter  conditions, 
the  state  and  the  state  alone  may  terminate  the  contract. 
Any  such  forfeiture  must  usually  be  effected  through  judicial 
proceedings.  The  legislature,  either  in  the  laws  under  which 
the  charter  is  granted  or  by  subsequent  enactment,  might,  it 
is  true,  provide  that  certain  acts  shall  ipso  facto  terminate 
corporate  existence.  The  intent  to  do  so  must,  however,  be 
perfectly  clear,  and  the  tendency  of  the  courts  is,  if  possible, 
to  construe  such  statutes  as  rendering  the  charter  voidable 
rather  than  void,  making  it  necessary  for  the  state  to  bring 
judicial  proceedings  to  secure  forfeiture.  Matter  of  N.  Y.  & 
L.  Id.  Bridge  Co.  v.  Smith,  148  N.  Y.  540  (1896).  At  pres- 
ent in  New  York  no  recognized  statutory  grounds  exist  for 
the  ipso  facto  dissolution  of  a"  corporation,  or  forfeiture  of 
its. charter  powers  without  judicial  proceedings. 


CORPORATE  EXISTENCE.  53 

A  breach,  justifying  forfeiture  of  the  corporate  charter, 
may  result  either  from  non-user  or  abuse  of  the  corporate 
powers  and  franchises.  An  action  to  annul  a  charter  may  be 
brought  only  upon  leave  granted  by  the  Supreme  Court  to 
the  Attorney  General  on  his  written  application,  stating  that, 
in  his  opinion,  the  action  can  or  ought  to  be  maintained  (Mat- 
ter of  Atty.  General,  79  Hun  369  [1894])  on  one  of  the 
following  grounds : 

(1)  That  the  corporation  has  offended  against  a  provi- 
sion of  an  act,  by  or  under  which  it  was  created,  altered  or 
renewed,  or  of  any  act  amending  the  same. 

(2)  That  it  has  failed  to  observe  provisions  of  law 
whereby  it  has  forfeited  its  charter,  i.  e., 

(a)  That  it  has  failed  to  begin  business  within 
two  years  from  date  of  its  incorporation.     (See  §  53.) 
(G.  C.  L.,  §31.) 

(b)  That  it  has  failed  to  make  payment  of  one-half 
its  capital  stock  within  a  year  from  date  of  incorporation. 
(See  §  74-)     (B.  C.  L.,  §  5.) 

(c)  That  it  has  wilfully  neglected  to  pay  its  fran- 
chise tax  within  a  year  after  notice.     (Tax  Law,  §  200.) 

(3)  That  it  has  forfeited  its  privileges  and  franchises 
by  a  failure  to  exercise  its  powers. 

(4)  That  it  has  done  or  omitted  any  act  which  amounts 
to  a  surrender  of  its  corporate  rights,  privileges  and  fran- 
chises. 

(5)  That  it  has  exercised  a  privilege  or  franchise  not 
conferred  upon -it  by  law.     (Code  Civ.  Pro.,  §  1798.) 

The  discretionary  power  of  the  Attorney  General  in  ap- 
plying for  leave  is  absolute.  He  may  act  on  his  own  volition 
or  on  application  made  to  him  by  any  citizen.  The  court 
may  grant  or  refuse  leave,  in  its  discretion,  and  its  decision 
is  not  reviewable.  People  v.  B.  S.  &  C.  Co.,  131  N.  Y.  140 
(1892): 


54        -  NEW    YORK    CORPORATIONS. 

In  cases  where  the  statute  expressly  imposes  the  penalty 
of  forfeiture  for  certain  offences,  the  court  has  no  discretion 
but  must  declare  the  charter  void  upon  proof  of  the  facts. 
But  in  other  cases  something  more  than  a  mere  ultra  vires  act 
must  be  proven.  To  justify  forfeiture  of  corporate  existence 
"the  state  as  prosecutor,  must  show  on  the  part  of  the  corpora- 
tion accused  some  sin  against  the  law  of  its  being  which  has 
produced,  or  tends  to  produce,  injury  to  the  public.  The  trans- 
gression must  not  be  merely  formal  or  incidental,  but  material 
and  serious,  and  such  as  to  harm  or  menace  the  public  welfare ; 
for  the  state  does  not  concern  itself  with  the  quarrels  of  pri- 
vate litigants.  It  furnishes  for  them  sufficient  courts  and 
remedies,  but  intervenes  as  a  party  only  where  some  public 
interest  requires  its  action."  People  v.  N.  Riv.  S.  Ref.  Co., 
121  N.  Y.  582  (1890).  (See  §  73-)1 

§56.     Dissolution. 

The  statutory  method  of  dissolution  is  seldom  resorted 
to  in  actual  practice.  If  an  enterprise  proves  unsuccessful 
and  no  material  assets  exist,  the  corporate  organization  is 
usually  abandoned  and  as  there  is  nothing  to  be  gained  by 
procedure  against  the  practically  defunct  corporation,  it  sinks 
out  of  sight  unnoticed  save  by  unpaid  but  helpless  creditors. 
If  assets  exist  and  the  number  of  stockholders  is  small,  they 
usually  arrange  matters  to  their  mutual  satisfaction  and  dis- 
band without  formality,  and,  if  creditors  are  paid  in  full,  there 
is  no  one  to  complain  that  dissolution  was  irregular. 

At  times,  however,  formal  dissolution  is  desirable.  It 
may  be  effected  by  the  following  procedure : 

A  special  meeting  of  the  board  of  directors  must  be  called 
on  three  days'  notice,  and  a  majority  of  the  whole  board  must 
adopt  a  resolution  thereat  recommending  dissolution.  The 

*For  details  of  procedure,  see  Code  Civ.  Pro.,  81  1797-1803,  1808,  1986, 
and  the  following  cases:  People  v.  Broadway  R.  R.,  56  Hun  45  (1890); 
People  v.  N.  Rlv.  Sugar  Ref.  Co.,  121  N.  Y.  682  (1890);  People  v.  B.  S. 
&  C.  Co.,  131  N.  T.  140  (1892). 


CORPORATE  EXISTENCE.  55 

directors  must  then  call  a  stockholders'  meeting  not  less  than 
thirty  nor  more  than  sixty  days  after  their  own  meeting. 
Notice  of  the  time  and  place  of  such  meeting  must  be  publish- 
ed at  least  once  a  week  for  three  weeks  successively  next  pre- 
ceding the  time  appointed  for  holding  such  meeting,  in  one 
or  more  newspapers  published  and  circulating  in  the  county 
where  the  principal  office  is  situated.  On  or  before  the  first 
day  of  publication  a  copy  of  the  notice  must  be  served  per- 
sonally on  each  stockholder,  or  mailed  to  his  last  known  office 
address. 

The  stockholders'  meeting  must  be  held  in  the  city,  town 
or  village  where  the  last  preceding  annual  meeting  took  place, 
and,  if  necessary,  it  may  be  adjourned  by  consent  of  a  majority 
of  those  present,  from  time  to  time,  if  due  notice  of  such  ad- 
journment is  published  in  the  same  papers  in  which  the  origi- 
nal call  appeared. 

An  approving  vote  of  two-thirds  of  the  outstanding  stock 
must  be  cast  at  such  meeting  to  secure  dissolution.  If  such 
vote  is  obtained,  the  following  papers  must  be  prepared  and 
filed  with  the  Secretary  of  State.  (See  Form  57a-d.) 

(1)  A  statement  showing  compliance  with  the  statute 
requirements,  accompanied  by  a  written  consent  to  such  disso- 
lution signed  by  all  the  stockholders  voting  in  favor  thereof 
and  accompanied  by  all  proxies  voted  upon.     The  consent 
must  be  attested  by  the  secretary  or  treasurer  and  the  presi- 
dent or  vice-president. 

(2)  A  statement  of  the  names  and  residences  of  the 
then  existing  board  of  directors  and  the  names  and  residences 
of  the  officers  of  the  corporation,  duly  verified  by  either  the 
secretary,  the  treasurer  or  the  president. 

Upon  receipt  of  these  papers  in  due  form,  the  Secretary 
of  State  issues,  in  duplicate,  a  certificate  of  their  filing.  One 
copy  of  this  certificate  must  be  filed  with  the  clerk  of  the 
county  where  the  principal  place  of  business  is  located,  and  a 
copy  must  be  published,  once  a  week  for  two  weeks,  in  one  or 


56  NEW    YORK    CORPORATIONS. 

more  newspapers  published  and  circulated  in  the  county  of 
the  principal  office.  The  dissolution  of  the  corporate  organi- 
zation is  then  complete. 

No  fees  are  paid  to  the  Secretary  of  State  except  $i  each 
for  the  certificates  of  filing.  The  fee  to  county  clerk  for  filing 
the  certificate  is  6  cents. 

The  directors  are  trustees  to  wind  up  the  business.  All 
corporate  liabilities  must  first  be  provided  for.  Then,  if  any 
property  is  left,  the  directors  may  dispose  of  it  to  the  best 
advantage  for  cash  and  distribute  the  proceeds  among  the 
stockholders  pro  rata,  or,  with  the  consent  of  two-thirds  of 
the  stockholders,  may  sell  the  remaining  property  and  busi- 
ness to  any  corporation  engaged  in  carrying  on  the  same 
general  business  in  the  state  and  accept  the  purchase  price 
thereof  in  the  stock  or  bonds  of  such  corporation  for  distri- 
bution among  the  stockholders  in  lieu  of  money.  Dissenting 
stockholders  may  secure  appraisal  of  their  stock  and  may  sell 
their  stock  to  the  corporation  at  the  value  determined  if  they 
apply  to  the  Supreme  Court  within  sixty  days  after  mailing 
of  notice  of  the  proposed  sale.  (S.  C.  L.,  §  57.) 


CHAPTER  VII. 


CORPORATE  POWERS. 


§  57.     General. 

Corporations  have  only  such  general  powers  as  are  ex- 
pressly or  impliedly  conferred  upon  them  by  the  incorporating 
acts.  Barnes  v.  Bank,  19  N.  Y.  152,  163  (1859).  Judges  and 
text  writers  at  an  early  date,  maintained  that  certain  powers, 
deemed  by  them  to  be  essential  to  corporate  existence,  were 
"implied"  in  every  grant  of  incorporation.  Thomas  v.  Dakin, 
22  Wend.  9  (1839).  The  New  York  statute  has  reflected 
their  conception  of  corporate  necessities  by  an  enumeration  of 
these  powers  in  a  general  grant  to  all  domestic  corporations. 
(G.  C.  L.  §  n.)  (See  §  16.)  These  powers  are  as  follows: 

§  58.     (i)  To  Have  Succession. 

All  corporations  have  succession  for  the  charter  period, 
or  perpetually  when  no  period  is  specified.  (G.  C.  L.,  §  n, 
subdiv.  i.)  The  term  "succession"  does  not  refer  to  cor- 
porate existence  but  means  that  the  "corporation"  is  distinct 
from  its  members  and  is  not  affected  by  changes  in  their  per- 
sonnel. This  is  a  characteristic  feature  of  the  corporation  and 
is  indispensable  to  corporate  existence.  It  enables  the  cor- 
poration to  continue  unchanged,  despite  the  mutations  of  its 
membership.  In  it  "consists  the  essence  and  great  value  of 
these  institutions."  Thomas  v.  Dakin,  supra. 

57 


58  NEW    YORK    CORPORATIONS. 

§  59.     (2)  To  Appoint  Officers  and  Agents. 

Every  corporation  may  appoint  such  officers  and  agents 
as  its  business  requires  and  fix  their  compensation.  (G.  C.  L., 
§  n,  subdiv.  4).  (See  §  127.) 

This  is  an  essential  power  since  the  impersonal  character 
of  a  corporation  makes  direct  action  impossible.  The  subject 
of  officers  is  treated  in  detail  in  Chapter  XII,  "Officers." 

§  60.     (3)  To  Make  By-Laws. 

Corporations  may  make  by-laws  not  inconsistent  with 
existing  law.  (G.  C.  L.,  §  n,  subdiv.  5.)  Important  details 
which  may  be  provided  for  in  the  by-laws  are  enumerated 
in  the  statute.  (See  Chap.  IV,  "By-Laws.") 

§  61.     (4)  To  Have  a  Seal. 

Corporations  may  adopt  a  corporate  seal  and  change  the 
same  at  pleasure.  (G.  C.  L.,  §  n,  subdiv.  2.) 

Seals  have  lost  so  much  of  the  importance  attached  to 
them  at  common  law  that  this  power,  once  one  of  the  most 
cherished  of  corporate  possessions,  has  sunk  to  comparative 
insignificance.  Formerly  the  seal  was  either  in  itself  the  cor- 
porate signature  or  was  an  essential  feature  of  the  same.  Now 
it  is  well  settled  that  a  corporation  need  use  a  seal  only  in 
cases  where  an  individual  is  required  to  do  so.  Leinkauf  v. 
Caiman,  no  N.  Y.  50,  54  (1888).  It  is  usual  and  good  prac- 
tice, however,  to  affix  the  seal  to  all  corporate  contracts  and 
other  instruments  of  importance.  A  seal  will  never  lessen  the 
legal  effect  of  a  document  and  the  added  impressiveness  it 
gives  to  a  transaction  is  occasionally  very  desirable.  The 
statute  requires  that  the  seal  be  used  on  stock  certificates. 
(S.  C.  L.,  §  40.) 

The  seal  may  be  of  any  form,  and  bear  any  inscription, 
name  or  device  desired.  In  practice  the  name  of  the  corpora- 


CORPORATE   POWERS.  59 

tion  and  the  state  and  the  year  of  incorporation  almost  in- 
variably appear  upon  the  face  of  the  seal.  The  form  of  the 
seal  and  the  matter  to  appear  upon  it  are  usually  fixed  by  the 
by-laws.  The  custody  of  the  seal  is  as  a  rule  given  to  the 
secretary. 

§  62.     (5)  To  Acquire,  Hold  and  Dispose  of  Property. 

Corporations  may  acquire,  hold  and  dispose  of  all  prop- 
erty necessary  for  corporate  purposes,  subject  to  any  limita- 
tions prescribed  by  law.  (G.  C.  L.,  §  n,  subdiv.  3.)  No 
restrictions  have  been  imposed  on  the  property  holding  power 
of  stock  corporations,  and  they  may  exercise  it,  within  the 
limits  of  the  corporate  purposes,  as  freely  as  may  an  indi- 
vidual. 

This  applies  to  both  real  and  personal  property.  It  is  an 
elementary  proposition  that  corporations,  though  created  for 
a  limited  term,  may  hold  and  convey  all  necessary  property 
in  fee  simple.  It  was  established  in  this  state  at  an  early  date. 
Nicoll  v.  N.  Y.  &  Erie  Ry.,  12  N.  Y.  121  (1854) ;  People  v. 
Mauran,  5  Den.  389  (1848).  Whether  any  particular  realty 
is  necessary  for  the  corporate  purposes  is  a  question  of  fact, 
with  the  presumption  in  favor  of  the  corporation.  Nicoll  v. 
Ry.,  supra.  A  corporation  may  issue  stock  full-paid  in  ex- 
change for  property,  and,  in  the  absence  of  fraud,  the  judg- 
ment of  the  directors  as  to  the  value  of  the  property  purchased 
is  conclusive  and  the  stock  will  be  held  full-paid.  (S.  C.  L., 
§42.)  (See  §84.) 

§  63.     Power  to  Hold  Property  in  Other  States. 

Section  14  of  the  General  Corporation  Law  in  terms 
permits  domestic  corporations  to  hold  property  in  other  states. 
It  is  scarcely  necessary  to  call  attention  to  the  fact  that 
whether  they  really  have  such  power  depends  upon  the  law 
of  the  jurisdiction  where  they  seek  to  exercise  it,  the  New 


6O  NEW    YORK    CORPORATIONS. 

York  statute  having  no  extra-territorial  effect.  Briscoe  v. 
So.  Kansas  Ry.,  40  Fed.  273  (1889).  It  has  been  decided  by 
the  United  States  Supreme  Court,  however,  that  the  comity  be- 
tween the  states  raises  the  presumption  that  a  corporation  of 
one  state,  not  forbidden  by  the  law  of  its  being,  may  acquire 
property  in  another  unless  it  is  prohibited  from  so  doing 
either  in  direct  enactments  of  the  latter  state,  or  by  its  public 
policy  deducible  from  the  general  course  of  legislation  or  from 
the  settled  adjudications  of  its  highest  court.  Co  well  v. 
Springs  Co.,  100  U.  S.  55  (1879)  ;  Christian  Union  v.  Yount, 
101  U.  S.  352  (1879). 

§  64.     Power  to  Hold  Its  Own  Stock. 

A  corporation  may  not  impair  its  capital  by  purchases 
of  its  own  stock.  If  such  a  purchase  is  made,  the  corporate 
assets  are  thereby,  temporarily  at  least  and  until  the  stock  is 
resold,  reduced,  and  the  security  to  which  creditors  are  legally 
entitled  is  correspondingly  reduced.  The  reason  for  this  rule 
fails  where  net  profits  are  used  for  such  purchases,  and,  in 
the  absence  of  improper  preferences  of  stockholders,  or  other 
fraud,  there  is  no  reason  why  the  corporate  earnings  should 
not  be  applied  to  the  reduction  of  its  outstanding  stock  instead 
of  being  distributed  as  dividends.  Lowe  v.  Pioneer  Thresh- 
ing Co.,  70  Fed.  Rep.  646  (1895). 

The  right  of  a  corporation  to  take  shares  of  its  own 
stock  as  security  for  or  in  payment  of  a  debt  is  well  settled. 
The  leading  case  is  City  Bank  v.  Bruce,  17  N.  Y.  507  (1858). 
A  corporation  may  also  take  its  stock  by  way  of  gift  or  be- 
quest. Lake  Superior  Iron  Co.  v.  Drexel,  90  N.  Y.  87  (1882). 

Stock  held  by  the  corporation  which  issues  it  has  none  of 
the  usual  rights  and  powers.  It  cannot  be  voted  (ex  parte 
Holmes,  5  Cow.  426  [1826]),  nor  is  it  entitled  to  dividends. 
It  does  not  necessarily  merge  and  become  unissued  stock,  but 
may  be  kept  outstanding  in  the  hands  of  trustees  or  on  the 


CORPORATE   POWERS.  6 1 

books  of  the  company  and  sold  at  its  market  value  by  order 
of  the  directors.  Vail  v.  Hamilton,  85  N.  Y.  453  (1881). 
Directors  authorizing  the  purchase  of  the  company's  stock, 
except  from  net  profits,  thereby  reducing  the  capital,  are  guilty 
of  a  misdemeanor.  (Pen.  Code,  §  594.) 

§  65.     Power  to  Hold  Stock  of  Other  Corporations. 

Early  cases  in  this  state  settled  the  common  law  right  of 
corporations  to  accept  stock  of  other  companies  in  payment 
of  or  as  security  for  debts.  Talmadge  v.  Pell,  7  N.  Y.  328 
(1852).  The  power  to  deal  in  stocks  beyond  this  requires 
express  statutory  authority.  Milbank  v.  Ry.,  64  How.  Pr. 
20  (1882).  This  authority  may  be  secured  under  §40  of 
the  Stock  Corporation  Law,  which  provides  that  corporations, 
except  monied  corporations,  may  obtain  the  unrestricted  right 
to  deal  in  stocks  and  bonds  by  suitable  provision  therefor  in 
their  original  or  amended  certificates  of  incorporation.  In 
the  absence  of  such  charter  provision,  the  statute  still  confers 
a  limited  power,  confining  it  to  the  purchasing,  acquiring, 
holding  and  disposing  of  stocks  and  bonds  of  companies  en- 
gaged in  the  same  general  business  as  that  of  the  purchasing 
corporation,  or  engaged  in  the  manufacture,  use  or  sale  of 
property,  or  in  the  construction  or  operation  of  works  neces- 
sary or  useful  in  its  business,  or  in  which,  or  in  connection 
with  which,  the  manufactured  articles,  product  or  property  of 
such  corporation  are,  or  may  be  used. 

§  66.     Status  of  Holding  Corporations. 

When  one  corporation  holds  stock  in  another,  the  direc- 
tors or  officers  of  the  former  are  eligible  as  directors  in  the 
latter  company,  and  the  holding  company  has  all  the  rights 
of  an  individual  stockholder  of  the  other  corporation.  (S. 
C.  L.,  §40.) 


62  NEW    YORK    CORPORATIONS. 

Where  a  corporation  owns  all  the  stock  of  another  en- 
gaged in  the  same  general  business,  it  may  by  due  procedure 
guarantee  the  bonds  of  the  subordinate  company.  (Id.) 
(See  §  68.) 

It  is  well  settled  that  a  corporation  may  own  all  the  stock 
of  another,  and  yet  the  two  may  continue  as  distinct  com- 
panies. Einstein  v.  Rochester  Gas  &  Electric  Co.,  146  N. 
Y.  46  (1895). 

If  the  power  of  purchasing  stock  is  used  by  a  corporation 
to  stifle  competition,  it  is  illegally  exercised.  The  purchase  of 
stock  for  such  purposes  will  be  set  aside  and  proceedings,  in 
the  nature  of  quo  warranto,  may  be  instituted  by  the  state  to 
secure  forfeiture  of  the  charter  of  the  offending  corporation. 
People  v.  N.  R.  S.  R.  Co.,  121  N.  Y.  582  (1890)  ;  Minn  v. 
Northern  Securities  Co.,  184  U.  S.  199  (1902). 

§  67.     Power     to     Borrow     Money.      Corporate     Bonds. 
Mortgages. 

Stock  corporations  may  borrow  money  necessary  for 
their  business  or  for  carrying  out  their  chartered  purposes 
and  may  issue  and  dispose  of  their  obligations  secured  by 
mortgage  on  their  property  for  any  amount  so  borrowed. 
(S.  C.  L.,  §  2.)  They  may  not  plead  usury  when  sued  for 
debt.  (L.  1850,  Ch.  172.) 

Corporate  mortgages,  except  purchase  money  mortgages, 
must  be  authorized  by  holders  of  two-thirds  of  the  stock,  by 
a  vote  given  at  a  special  meeting  called  on  the  same  notice  as 
is  required  for  the  annual  meeting  (see  §  101,  subdiv.  c)  or 
by  written  assent  of  a  like  amount  of  stock  without  a  meeting. 
(See  Forms  64-68.)  This  latter  provision  is  a  statutory 
modification  of  the  general  rule  that  action  of  the  stockholders 
must  be  taken  at  regularly  assembled  meetings.  In  either 
case,  the  president  or  vice-president  and  the  secretary  or  an 
assistant  secretary  must  make  and  acknowledge  a  certificate, 
under  the  corporate  seal,  showing  that  the  mortgage  has  been 


CORPORATE  POWERS.  63 

duly  authorized  by  the  stockholders,  and  must  file  the  same 
in  the  office  of  the  clerk  or  register  of  the  county  where  the 
principal  office  of  the  company  is  located.  (See  Chap.  XXV, 
"Bond  Issues,"  for  detailed  procedure  and  forms.) 

The  directors'  recital  in  a  mortgage,  publicly  recorded, 
that  the  assent  of  stockholders  to  the  bond  issue  has  been 
properly  obtained,  is  presumptively  true.  Any  person  may 
purchase  bonds  secured  by  the  mortgage  on  the  faith  of  such 
representations  and  as  to  him  they  will  hold.  If  any  such 
mortgage  remains  on  record  for  a  year,  the  consent  of  stock- 
holders is  conclusively  presumed  as  to  bondholders  for  value 
who  have  received  interest  according  to  the  terms  of  the 
agreement.  (S.  C.  L.,  §  8.) 

The  directors  may,  when  authorized  by  a  consent  of  the 
stockholders  similar  to  that  required  for  a  mortgage,  confer 
upon  bondholders  the  right  to  convert  the  principal  of  the 
debt  into  corporate  stock  at  any  time  from  two  to  twelve 
years  after  the  date  of  the  bonds.  The  directors  may  pre- 
scribe the  manner  of  making  the  conversion  and  the  conditions 
upon  which  it  may  take  place.  If  the  authorized  capital  stock 
is  insufficient  to  meet  the  conversion  when  made,  the  directors 
shall  authorize  an  increase  of  stock  to  the  required  amount 
by  causing  to  be  filed  with  the  Secretary  of  State  and  with  the 
clerk  of  the  county  where  the  principal  place  of  business  is 
situated,  a  certificate,  under  the  corporate  seal,  subscribed  and 
acknowledged  by  the  president  and  secretary  and  setting  forth : 

1 I )  A  copy  of  the  mortgage  or  resolution  of  the  direc- 
tors authorizing  the  issue  of  such  bonds. 

(2)  That  the  holders  of  not  less  than  two-thirds  of  the 
capital  stock  of  the  corporation  duly  consented  to  the  execution 
of  such  mortgage  or  resolution  of  directors  authorizing  the 
issue  of  such  bonds  by  the  corporation. 

(3)  A  copy  of  the  resolution  of  the  directors  of  the 
corporation  authorizing  the  increase  of  the  capital  stock  to  the 
amount  necessary  to  effect  the  conversion. 


64  NEW    YORK    CORPORATIONS. 

(4)  The  amount  of  capital  theretofore  authorized,  the 
proportion  thereof  actually  issued,  and  the  amount  of  the 
increased  capital  stock. 

The  increase  is  authorized  as  soon  as  this  certificate  is 
properly  filed.  (S.  C.  L.,  §  2.)  A  fee  of  one-twentieth  of 
one  per  cent,  upon  the  amount  of  increase  must  be  paid  the 
State  Treasurer  before  the  certificate  will  be  filed.  (Tax 
Law,  §  1 80.) 

§  68.     Power  to  Guarantee  Debts  of  Other  Corporations. 

A  corporation  owning  the  entire  capital  stock  of  another 
company  may  guarantee  the  bonds  of  this  latter  company  if 
two-thirds  of  its  own  stock  assents. .  Any  stock  corporation, 
in  pursuance  of  a  unanimous  vote  of  its  stock  at  a  special 
meeting  called  by  written  notice  signed  by  a  majority  of  the 
directors  and  served  upon  each  stockholder  of  record  person- 
ally or  by  mail  at  least  sixty  days  prior  to  the  meeting,  may 
guarantee  the  bonds  of  another  domestic  corporation  engaged 
in  the  same  general  business.  (S.  C.  L.,  §  40.)  (See  §  Qod.) 

§  69.     Power  to  Do  Business  in  Other  States. 

This  power  is  recognized  though  not  expressly  conferred 
by  the  statutes.  (B.  C.  L.,  §  2;  G.  C.  L.,  §  14.)  It  may  be 
obtained,  subject,  of  course,  to  the  regulations  of  the  jurisdic- 
tion where  exercised,  by  express  charter  provision,  if  desired, 
and  the  organization  of  corporations  under  the  New  York 
statutes  to  conduct  business  outside  the  state  is  even  encour- 
aged by  the  adjustment  of  the  franchise  tax  on  a  basis  of 
capital  employed  within  the  state.  (See  §  138.)  The  liberal 
provisions  of  the  1901  amendments  to  the  New  York  corpora- 
tion statutes,  reducing  the  organization  tax  and  relaxing  the 
requirements  in  the  matter  of  corporate  reports,  has  greatly 
increased  the  popularity  of  the  state  as  the  home  of  corpora- 
tions organized  to  transact  business  elsewhere.  (See  §  179.) 


CORPORATE  POWERS.  65 

§  70.     Consolidation  of  Corporations. 

Two  or  more  domestic  corporations  engaged  in  the  same 
kind  of  business  may  consolidate  (Cameron  v.  Water  Co.,  133 
N.  Y.  336  [1892]),  and  form  a  new  corporation  possessing 
the  joint  rights,  franchises  and  property,  and  subject  to  all 
the  obligations  .of  the  constituent  companies.  (B.  C.  L., 
§§  8-12.)  To  effect  consolidation,  the  respective  corpora- 
tions enter  into  an  agreement  signed  by  a  majority  of  each 
board  of  directors  and  under  their  corporate  seals,  setting 
forth  (B.  C.  L.,  §  8)  : 

(1)  The  terms  and  conditions  upon  which  con- 
solidation is  to  be  effected. 

(2)  The  mode  of  carrying  it  into  effect. 

(3)  The  name  of  the  new  corporation. 

(4)  The  number  of  directors. 

(5)  The  names  and  post-office  addresses  of  the 
directors  for  the  first  year. 

(6)  The  term  of  its  existence,  which  shall  not 
exceed  fifty  years. 

(7)  The  name  of  the  town  or  towns,  county  or 
counties  in  which  its  operations  are  to  be  carried  on. 

(8)  The  name  of  the  town  or  city  and  county  in 
this  state  in  which  its  principal  place  of  business  is  to  be 
situated. 

(9)  The  amount  of  the  capital  stock  not  exceed- 
ing the  fair  aggregate  value  of  the  property,  franchises 
and  rights  of  such  corporations. 

(10)  The  number  of  shares. 

( 1 1 )  The  manner  of  distributing  such  capital  stock 
among  the  holders  thereof. 

(12)  If  one  or  more  of  the  consolidating  corpora- 
tions has  been  organized  for  the  purpose  of  carrying  on 
any  part  of  its  business  outside  of  New  York,  the  agree- 
ment shall  so  state. 

(13)  Any  other  particulars  the  parties  deem  neces- 
sary, but  no  provision  may  be  inserted  to  deprive  non- 
assenting  creditors  of  any  rights   against   the   original 


66  NEW    YORK    CORPORATIONS. 

companies.     Matter  of  Utica  Brewing  Co.,   154  N.  Y. 
268  (1897). 

After  the  agreement  is  completed,  special  meetings  of  the 
stockholders  of  the  several  corporations  must  be  called,  upon 
at  least  two  weeks'  notice,  specifying  the  time,  place  and  object 
of  the  meeting,  such  notice  to  be  mailed  to  each  stockholder 
and  published  for  two  successive  weeks  in  one  of  the  news- 
papers in  each  of  the  counties  of  this  state  in  which  the  several 
corporations  have  their  places  of  business. 

The  proposed  agreement  must  be  submitted  to  each  meet- 
ing and  be  voted  on  by  ballot.  If  it  receives  the  approval  of 
two-thirds  in  interest  of  the  stock  of  each  company,  the  agree- 
ment is  ratified.  The  secretaries  of  the  several  meetings  must 
make  sworn  copies  of  the  proceedings  in  duplicate  which  must 
be  attached  to  duplicate  copies  of  the  agreement.  One  set  of 
papers  must  be  filed  with  the  Secretary  of  State  and  the  other 
with  the  clerk  of  the  county,  within  the  state,  where  the  new 
corporation's  principal  office  is  established.  (B.  C.  L.,  §  9.) 

The  filing  and  recording  fees  are  the  same  as  on  an 
original  incorporation,  viz :  to  Secretary  of  State,  $10  for  filing 
and  15  cents  per  folio  for  recording;  to  county  clerk,  6  cents 
for  filing  and  10  cents  per  folio  for  recording.  If  the  capital 
stock  of  the  new  corporation  exceeds  the  aggregate  capital 
stock  of  the  constituent  companies,  an  organization  tax  of 
one-twentieth  of  one  per  cent,  on  such  excess  must  be  paid  the 
State  Treasurer. 

Any  dissenting  stockholder  may,  at  the  meeting  or  within 
twenty  days  thereafter,  object  to  the  consolidation  and  demand 
payment  for  his  stock,  and  within  sixty  days  after  the  consoli- 
dation takes  effect  may  apply  to  the  Supreme  Court  at  special 
term  for  the  appointment  of  three  appraisers  to  fix  the  value  at 
which  the  new  corporation  must  buy  in  his  stock  and  the  man- 
ner in  which  payment  therefor  shall  be  made.  Trask  v.  Plow 
Works,  6  Hun  236  (1875).  Where  consolidation  is  voted 
by  ninety  per  cent,  of  the  stock  and  a  dissenting  stockholder 


CORPORATE  POWERS.  67 

fails  for  sixty  days  to  take  advantage  of  his  privilege  to  retire, 
the  corporation  can  force  him  out  by  making  application  as 
above,  with  payment  of  the  amount  determined  by  the  ap- 
praisers. (B.  C.  L.,  §  12.) 

§  71.     Merger. 

If  a  domestic,  or  foreign  corporation  authorized  to  do 
business  in  the  state,  owns  all  the  stock  of  another  corporation 
organized  for  or  engaged  in  a  business  similar  or  incidental 
to  that  of  the  holding  company,  the  latter  may  file  with  the 
Secretary  of  State  a  certificate  of  ownership  under  its  cor- 
porate seal  and  a  copy  of  a  resolution  of  its  directors  to  merge 
such  other  corporation.  The  property,  franchises  and  liabili- 
ties of  the  subordinate  company  thereupon  pass  to  said  holding 
corporation  in  the  same  manner  as  in  case  of  consolidation. 
(S.  C.  L.,  §  58.)  (For  fees,  see  Table,  page  347.) 

§  72.     Amendment  of  the  Charter. 

In  New  York  almost  any  right,  power  or  privilege  may 
be  attained  by  amendment  that  might  have  been  secured 
through  the  original  charter.  Procedure  to  secure  any  such 
amendment  varies  with  the  nature  of  the  change  desired.  The 
usual  amendments  and  the  methods  prescribed  in  each  case 
are  outlined  on  the  following  page. 

In  each  of  these  cases,  unless  otherwise  specified,  the 
certificate  of  amendment,  or  certified  proceedings,  must  be 
filed  for  record  with  the  Secretary  of  State  and  with  the  clerk 
of  the  county  of  the  principal  office,  as  in  the  case  of  an 
original  certificate.  (G.  C.  L.,  §  5.)  The  fees  to  Secretary 
of  State  for  recording  are  15  cents  per  folio  of  100  words; 
to  the  county  clerk,  10  cents  per  folio  for  recording  and  6 
cents  for  each  instrument  filed.  No  filing  fee  is  paid  the  Sec- 
retary of  State,  nor  is  any  organization  tax  payable  to  the 
State  Treasurer,  except  on  increase  of  capital  stock. 


68  NEW   YORK    CORPORATIONS. 

It  is  to  be  noted  that  when  action  is  required  of  the  stock- 
holders, such  action  must  always  be  taken  at  a  duly  assembled 
stockholders'  meeting,  except  in  the  few  cases  where  the 
statutes  expressly  provide  that  a  consent  of  the  stockholders 
may  be  expressed  in  writing  without  a  meeting.  Also  when 
a  meeting  is  requisite  it  must  always  be  called  in  strict  accord 
with  statutory  and  by-law  requirements  unless  these  require- 
ments are  waived  by  a  written  waiver  signed  by  every  stock- 
holder entitled  to  be  present  at  such  meeting. 

In  any  of  the  following  cases  where  publication  of  notice 
of  meeting  is  required,  such  publication  must  be  made  in  a 
paper  published  in  the  county  in  which  the  principal  office  is 
located,  and  if  service  by  mail  is  required,  the  notice  must  be 
mailed  to  every  stockholder  at  his  last  known  post-office  ad- 
dress. 

(a)  To  Secure  New  Purposes  of  Same  General 
Character.     Amendment  must  be  authorized  by  major- 
ity vote  of  directors  and  by  vote  of  at  least  three-fifths 
of  the  capital  stock,  cast  at  a  meeting  specially  called  for 
that  purpose  in  accordance  with  any  by-law  requirements 
as  to  special  meetings.     Notice  of  such  meeting  must 
state  time,  place  and  object,  be  signed  by  the  president 
or  vice-president  and  secretary  and  be  published  once  a 
week  for  two  successive  weeks,  and  be  served  by  mail 
two  weeks  or  personally  five  days  before  the  meeting. 
The  amended  certificate  must  recite  the  facts,  be  signed 
by  the  president  and  secretary  and  must  be  accompanied 
by  a  copy  of  the  proceedings  of  the  special  meeting,  veri- 
fied by  the  oath  of  a  director  present.     (S.  C.  L.,  §  32, 
am'd  L.  1905,  Ch.  751.) 

(b)  Increase  of  Capital  Stock.     Amendment  must 
be  authorized  by  a  majority  vote  of  the  stock  at  a  meeting 
specially  called  for  the  purpose.     Notice  of  meeting  must 
state  time,  place  and  object  and  the  amount  of  increase; 
must  be  signed  by  the  president  or  vice-president  and 
secretary ;  be  published  once  each  week  for  two  successive 
weeks,  and  be  served  by  mail  two  weeks,  or  personally 


CORPORATE  POWERS.  69 

five  days  before  the  meeting.  Unanimous  written  con- 
sent of  the  stockholders  to  the  amendment  will  obviate 
the  necessity  of  a  meeting.  Certificate  must  recite  the 
facts,  show  authorized  capitalization,  amount  thereof 
issued  and  the  amount  of  increase,  and  be  signed,  verified 
and  acknowledged  by  the  chairman  and  secretary  of  the 
meeting.  Organization  tax  of  50  cents  per  $1,000  of 
increase  must  be  paid  to  State  Treasurer.  Proceedings 
of  meeting  or  consent  must  be  entered  on  the  minutes  of 
the  corporation.  (S.  C.  L.,  §§44,  45,  46.)  (See  §  86; 
also  Form  55.) 

(c)  Decrease  of  Capital  Stock.     Same  as  for  in- 
crease of  capital  stock  except  that  certificate  must  state 
in  addition  the  whole  amount  of  the  ascertained  debts  and 
liabilities  of  the  corporation  and  must  have  endorsed  up- 
on it  the  certificate  of  the  comptroller  that  the  reduced 
capital  is  in  excess  of  the  ascertained  debts  and  sufficient 
for  the  proper  corporate  purposes.    Comptroller's  fee,  $i. 
(S.  C.  L.,  §§  44,  45,  46.)     (See  §  86;  also  Form  55.) 

(d)  Increase  or  Decrease  of  Number  of  Shares. 
As  for  increase  of  stock,  except  that  a  two-thirds  vote  of 
all  stock  duly  represented  at  the  meeting  is  required  and 
certificate  instead  of  details  as  to  amount  of  capital  stock 
must  show  original  number  of  shares,  number  issued  and 
outstanding  and  increase  or  decrease  of  number.     (S.  C. 
L.,  §  56.)     (See  §  80.) 

(e)  Change  of  Number  of  Directors.     Must  be 
authorized  by  a  majority  vote  of  all  the  stock  at  a  meet- 
ing held  at  the  usual  place  of  meeting  of  the  directors, 
on  two  weeks'  notice  in  writing  served  personally  or  by 
mail.     Proof  of  service  of  notice  must  be  filed  in  office 
of  corporation  at  or  before  time  of  meeting.     Proceed- 
ings must  be  entered  on  minutes  and  transcript  thereof, 
verified  by  the  president  and  secretary  of  the  meeting, 
be  filed  as  was  original  certificate.     Unanimous  written 
consent  of  the  stockholders   will   obviate  the  necessity 
of  meeting  but  such  consent  must  have  annexed  thereto 
an  affidavit  of  the  custodian  of  stock  book  that  the  signers 


70  NEW    YORK    CORPORATIONS. 

represent  the  entire  capital  stock  and  must  then  be  filed 
as  the  verified  proceedings  are  when  the  action  is  taken 
at  a  meeting.  (S.  C.  L.,  §  21.)  (See  §  113;  also  Form 
56.) 

(f)  Change  of  Location  of  Principal  Office.    Must 
be   authorized   by   a   majority   vote   of   the    stock   at   a 
special  meeting  duly  called  for  that  purpose,  or  without 
a  meeting  by  unanimous  written  consent  of  all  the  stock- 
holders, such  written  unanimous  consent  to  be  duly  ac- 
knowledged and  filed  in  the  office  of  the  SecretaFy  of 
State.    The  certificate  of  amendment  must  be  signed  and 
sworn  to  by  the  president,  secretary  and  a  majority  of 
the  directors  and  state  the  name  of  the  corporation,  the 
city,  town  or  county  where  office  was  originally  located, 
and  to  which  it  may  subsequently  have  been  changed ; 
the  new  location  desired  and  that  it  proposes  to  actually 
conduct  its  business  there  and  that  such  change  has  beenj 
duly  authorized.    The  names  and  residences  of  the  direc- 
tors must  also  be  included  and  the  duly  executed  certifi- 
cate be  filed  with  the  clerks  of  counties  where  office  was 
located  and  to  which  it  is  removed  and  with  the  Secretary 
of  State.     (S.  C.  L.,  §  59,  amended  L.  1905,  Ch.  489.) 
(See  §  134;  also  Form  53.) 

(g)  Classification    of    Stock.     Requires    a    two- 
thirds  vote  of  stock  at  special  meeting  called  on  notice 
as  required  for  annual  meeting,  viz. :  two  weeks  publi- 
cation and  such  other  notice  as  prescribed  by  the  by-laws. 
A  certificate  of  the  proceedings  of  such  meeting  must 
be  signed  and  sworn  to  by  the  president  or  vice-president 
and  secretary  or  assistant  secretary,  and  must  be  filed  as 
was  original  certificate.     (S.  C.  L.,  §  47.)     (See  §  77; 
also  Form  54.) 

(h)  Extension  of  Corporate  Existence.  Re- 
quires the  consent  of  two-thirds  of  the  stock  given  by 
vote  at  a  meeting  called  as  is  annual  meeting,  or  such 
consent  may  be  given  in  writing,  when  no  meeting  is  re- 
quired. The  certificate  of  amendment  must  state  that 
such  consent  was  given  and  specify  the  manner  in  which 


CORPORATE  POWERS.  71 

it  was  given,  and  be  subscribed  and  acknowledged  by 
the  president  or  vice-president  and  the  secretary  or  an 
assistant  secretary,  under  the  corporate  seal,  and  be  filed 
as  was  the  original  certificate  of  incorporation.  (G.  C. 
L.,  §  32.)  (See  §  54.)  (For  notice  of  annual  meeting, 
see  §  101.) 

(i)  Change  of  Corporate  Name.  Though  not 
specifically  so  prescribed,  except  for  banking,  insurance 
and  railway  corporations,  a  change  of  name  is  usually 
authorized  by  resolution  of  the  directors.  Petition  for 
change  must  be  made  at  a  special  term  of  the  Supreme 
Court  in  the  judicial  district  where  the  principal  office  is 
located.  (Code  of  Civ.  Proc.,  §  2411.)  The  petition  must 
be  in  writing,  be  signed  by  the  petitioner,  and  be  verified 
as  is  a  pleading  in  a  court  of  record,  by  the  official  affixing 
the  corporate  signature.  (Id.,  §  2412.)  It  must  state 
the  present  name  of  corporation,  the  name  to  be  assumed 
and  must  specify  the  grounds  of  the  application  (Id.), 
and  must  have  annexed  thereto  a  certificate  of  the  Secre- 
tary of  State  that  the  name  proposed  is  not  the  same,  or 
so  nearly  the  same,  as  that  of  another  domestic  corpora- 
tion as  to  be  calculated  to  deceive.  (Id.,  §  2411.)  A 
copy  of  the  petition  and  notice  of  motion  must  be  filed 
with  Secretary  of  State,  which  has  the  effect  of  reserving 
the  proposed  name  for  the  applicant  corporation  while  the 
proceedings  are  pending.  (Id.,  §  2413.)  Outside  of 
New  York  City  notice  of  the  presentation  of  petition 
must  be  published  once  a  week  for  six  successive  weeks 
in  the  state  paper,  also  in  a  paper  of  every  county  in 
which  the  corporation  has  a  business  office.  In  the  city 
and  county  of  New  York  publication  must  be  made  in 
two  daily  newspapers  published  in  the  county.  (Id.) 
Within  ten  days  of  entry  thereof,  the  order  granting  the 
change  and  the  papers  on  which  the  order  is  granted 
must  be  filed  with  the  clerk  of  the  county  of  the  principal 
office,  and  a  certified  copy  be  filed  with  the  Secretary  of 
State.  Also  within  the  same  period,  publication  of  the 
order  must  be  begun  and  continued  once  each  week  for 
four  successive  weeks  in  a  paper  designated  by  the  order. 
(Id.,  §  2414.)  Within  forty  days  of  the  entry  of  order 


72  NEW    YORK    CORPORATIONS. 

affidavit  of  publication  thereof  must  be  filed  in  the  office 
in  which  the  order  is  entered  and  in  any  other  offices  in 
which  a  certified  copy  of  order  was  filed.  (Id.,  §  2415.) 
(See  Form  52.)  Fees  to  county  clerk  are  10  cents  per 
folio  for  recording  order,  6  cents  for  filing  and  8  cents 
per  folio  for  certified  copy.  For  recording  affidavit  of 
publication,  10  cents  per  folio  and  6  cents  for  filing  same. 
Fees  to  Secretary  of  State,  $i  for  certificate  that  name 
does  not  conflict,  and  15  cents  per  folio  for  recording 
order. 

Informalities  or  obvious  defects  in  the  original,  amended 
or  supplemental  certificate  of  incorporation  may  be  corrected 
by  an  amended  certificate  which  may  be  filed  either  by  the 
incorporators  or  directors.  The  Supreme  Court,  on  notice  to 
the  Attorney  General,  and  upon  proof  that  a  charter  does  not 
truly  set  forth  the  object  and  purpose  of  the  corporation,  may 
amend  it  to  conform  to  the  intentions  of  the  parties.  (G.  C. 
L.,  §  7.)  (For  examples  of  Charter  Amendments,  see  Forms 
52-56.)  (For  fees,  see  generally  "Table  of  Fees,"  page  347.) 

§73.     Ultra  Vires  Acts. 

Reference  has  already  been  made  to  the  relaxation  in 
practice  of  the  doctrine  that  a  private  corporation  may  exer- 
cise only  those  powers  expressly  granted  or  necessarily  im- 
plied. (See  §  19.)  Many  acts  which  are  not  permissible 
under  this  rule  are  daily  consummated.  The  assent  of  stock- 
holders and  the  lack  of  injury  to  creditors  leaves  the  state  the 
only  party  competent  to  complain,  and  where  the  business  is 
private  in  its  nature  the  courts  will  not  decree  forfeiture,  un- 
less it  is  clearly  shown  that  some  public  injury  has  resulted. 
Kent  v.  Quicksilver  Mining  Co.,  78  N.  Y.  159,  186  (1879)  ; 
People  v.  N.  R.  Sugar  Ref.  Co.,  121  N.  Y.  582  (1890). 


CHAPTER  VIII. 
CAPITAL  STOCK. 


§  74.     Capital  Stock.    Statute  Requirements  as  to  Payment. 

"Capital  stock"  must  be  distinguished  from  "capital." 

"The  capital  of  a  corporation  consists  of  its  funds,  securi- 
ties, credits  and  property  of  whatever  kind  which  it  pos- 
sesses." Christensen  v.  Eno.,  106  N.  Y.  97,  100  (1887), 
Andrews,  J. 

The  "capital  stock"  is  the  total  amount  of  stock  as  fixed 
by  the  charter  of  the  corporation  which  it  may  issue  in  ex- 
change for  the  money  or  property  paid  in  by  its  subscribers. 
It  is  the  interest  which  the  latter  secure  in  the  corporate  enter- 
prise by  such  payment.  At  the  outset  if  a  company  issues  all 
its  shares  at  par  for  actual  value,  the  capital  stock  and  the 
capital  are  equal.  (Id.)  It  is  apparent,  however,  that  though 
the  former  is  a  fixed  amount  established  by  the  terms  of  the 
charter  and  not  to  be  changed  except  by  charter  amendment, 
the  latter  consisting  as  it  does  of  actual  assets,  may  vary 
greatly  with  the  ordinary  vicissitudes  of  business  and  may  be 
either  greater  or  less  than  the  capital  stock. 

One-half  the  total  authorized  capital  stock  of  a  New 
York  corporation  must  be  paid  in  within  one  year  from  its 
incorporation  and  a  certificate  of  such  payment  must,  within 
thirty  days  thereafter,  be  signed  and  acknowledged  by  a  ma- 
jority of  the  directors,  be  verified  by  the  president  or  vice- 
president  and  secretary  or  treasurer  and  be  filed  in  the  offices 
where  the  certificates  of  incorporation  were  filed.  (B.  C.  L., 

73 


74  NEW    YORK    CORPORATIONS. 

§5.)  (See  Form  43.)  The  remainder  of  the  capital  stock 
may  be  issued  and  paid  for  at  the  discretion  of  the  corporation, 
or  may  be  left  unissued  if  desired.  (See  next  section.) 

§  75.     Amount  of  Capitalization. 

The  "capitalization"  of  a  corporation  is  the  amount  of 
capital  stock  it  is  authorized  to  issue  in  exchange  for  value. 
Under  the  New  York  statute  this  may  be  fixed  in  the  charter 
at  any  amount  above  $500  at  the  discretion  of  the  incorpora- 
tors.  (See  §  20.)  The  state  interposes  no  objection  to  any 
amount,  no  matter  how  large,  provided  that  the  required  fees 
are  paid.  In  fixing  the  capitalization  it  must,  however,  be 
borne  in  mind  that  at  least  one-half  its  amount  must  be  paid 
within  the  first  year.  (B.  C.  L.,  §  5.) 

It  is  not  necessary  to  issue  the  full  amount  of  authorized 
stock  at  any  one  time  or  by  any  definite  time.  Greenpoint 
Sugar  Co.  v.  Whitin,  69  N.  Y.  328  (1877).  The  require- 
ments of  the  New  York  statute  are  satisfied  if  one-half  is  paid 
within  one  year  from  the  date  of  incorporation.  (B.  C.  L., 
§5.)  People  v.  Cement  Co.,  131  N.  Y.  140  (1892).  The 
balance  may  remain  unissued  indefinitely.  This  enables  a  cor- 
poration by  capitalizing  at  more  than  its  present  needs,  to  pro- 
vide for  future  expansion.  Stock  may  then  be  issued  as 
needed,  whereas,  without  this  provision  power  to  increase  the 
capital  would  have  to  be  secured  by  charter  amendment.  No 
tax  of  any  kind  is  imposed  on  unissued  stock. 

The  power  of  a  corporation  to  issue  stock  is  strictly  limit- 
ed to  the  amount  authorized  by  its  charter.  Any  excess  is 
void.  Lathrop  v.  Kneeland,  46  Barb.  432  (1866);  N.  Y.  & 
N.  H.  Ry.  v.  Schuyler,  34  N.  Y.  30  (1865). 

§  76.     Classes  of  Stock.     Common  and  Preferred. 

"Every  domestic  stock  corporation  may  issue  preferred 
stock  and  common  stock  and  different  classes  of  preferred 


CAPITAL  STOCK.  75 

stock,  if  the  certificate  of  incorporation  so  provides,  or  by  the 
consent  of  the  holders  of  record  of  two-thirds  of  the  capital 
stock  given  at  a  meeting  called  for  that  purpose  upon  notice 
such  as  is  required  for  the  annual  meeting  of  the  corporation." 
(S.  C.  L.,  §  47.)  (See  Forms  54,  55.) 

Common  stock  is  that  which  enjoys  no  special  privilege 
as  to  corporate  dividends  or  assets.  Preferred  stock  is  that 
which  has  such  preferences.  The  use  of  preferred  stock  is 
general.  The  classifications  possible  under  the  liberal  provi- 
sions of  the  section  quoted,  include  almost  any  desired  lawful 
privilege.  Preferred  stock  is  usually  issued  to  avoid  raising 
money  for  corporate  purposes  by  borrowing  on  bond  and 
mortgage  and  the  preferential  privileges  are  adjusted  to  facili- 
tate its  sale.  Its  use  for  this  purpose  has  led  some  courts  to 
treat  the  issue  of  preferred  stock  as  a  borrowing  of  money, 
but  this  view  has  been  expressly  repudiated  in  New  York 
(Kent  v.  Quicksilver  Mining  Co.,  78  N.  Y.  159  [1879]), 
where  it  is  held  that  a  preferred  stockholder  differs  from 
others  only  in  being  entitled  to  certain  privileges  which  those 
others  do  not  possess.  Preferred  stock  possesses  the  advan- 
tage over  bonds  of  not  bearing  a  guaranteed  rate  of  interest 
and  of  not  subjecting  the  company  to  the  dangers  of  fore- 
closure. 

In  the  absence  of  provision  to  the  contrary,  preferred 
stock  has  all  the  privileges  of  common  stock  in  addition  to 
whatever  extraordinary  rights  it  may  possess.  The  most 
common  preference  is  in  the  matter  of  dividends,  the  usual  rate 
varying  from  five  per  cent,  to  seven  per  cent.  This  simply 
means  that  the  dividend  will  be  paid  if  earned,  for  preferred 
stock  is  subject  to  the  same  rule  in  that  respect  as  the  common. 
These  dividends  may  be  cumulative  or  non-cumulative.  Un- 
less expressly  denied  by  the  terms  of  issue,  however,  the  New 
York  courts  interpret  preferred  dividends  as  cumulative 
(Prouty  v.  Ry.,  I  Hun  655,  665  [1874]  ;  Boardman  v.  Lake 
Shore  Ry.,  84  N.  Y.  157  [1881])  ;  that  is,  all  arrearages  of 


76  NEW    YORK    CORPORATIONS. 

preferred  dividends  must  be  paid  before  the  common  stock  is 
entitled  to  dividends. 

Unless  otherwise  expressly  provided,  preferred  stock  par- 
ticipates equally  with  the  common  in  all  dividends  after  both 
have  received  an  equal  percentage  of  profit.  It  is  usual,  how- 
ever, to  specifically  deny  this  privilege,  except  in  cases  where 
there  are  reasons  for  making  the  preferred  stock  exceptionally 
attractive. 

Preferred  stock  is  not  entitled  to  any  greater  privileges 
than  the  common  in  the  distribution  of  assets  upon  corporate 
dissolution  unless  express  provision  is  made  to  that  effect.  It 
is  common  to  confer  such  preferential  rights,  however. 

Preferred  stock  has  the  same  voting  rights  as  common, 
unless  restricted  by  the  conditions  of  its  issue.  This  privilege 
may  be  denied,  placing  the  holders  of  such  stock  practically 
in  the  position  of  bondholders,  or  it  may  be  granted  condition-1 
ally.  (See  §  20;  also  Forms  29,  30.) 

§  77.     Classification  of  Stock.      After  Organization. 

The  creation  of  preferences  in  stock  subsequent  to  organi- 
zation may  be  accomplished  by  charter  amendment.  ( See 
§  72. )  A  special  meeting  of  the  stockholders  must  be  held,  on 
the  same  notice  as  is  required  for  the  annual  meeting  (see 
§  101,  subdiv.  c),  and  the  change  must  receive  a  favorable 
vote  of  two-thirds  of  the  entire  capital  stock.  The  president 
or  vice-president  and  the  secretary  or  assistant  secretary  must 
sign  a  certificate  under  oath  setting  forth  the  proceedings  at 
the  meeting  and  file  and  record  the  same  in  the  offices  where 
the  original  certificate  of  incorporation  was  filed.  (S.  C.  L., 
§  47.)  (See  §  72g;  also  Form  54  and  "Table  of  Fees," 
page  347.) 

§  78.     Redemption  of  Preferred  Stock. 

Upon  written  request  of  a  holder  of  preferred  stock,  the 
directors  may,  by  a  two-thirds  vote,  exchange  his  stock  for 


CAPITAL  STOCK.  77 

common  stock,  and  issue  certificates  of  common  stock  there- 
for, share  for  share,  or  upon  such  other  valuation  as  may  have 
been  agreed  upon  in  the  "certificate  of  organization  of  such 
corporation,  or  the  issue  of  such  preferred  stock,"  provided 
the  total  amount  of  capital  stock  is  not  thereby  increased. 
(S.  C.  L.,  §47-) 

There  is  no  express  statutory  authority  in  New  York  for 
the  issue  of  preferred  stock  redeemable  by  the  company  upon 
conditions  and  at  a  price  fixed  by  the  terms  of  its  issue,  but 
such  an  arrangement,  if  free  from  fraud,  would  undoubtedly 
be  sustained.  The  redemption  should  not,  however,  be  made 
obligatory,  but  merely  optional  with  the  company,  as  otherwise 
if  no  funds  were  in  hand  at  the  appointed  date  from  which 
such  stock  might  be  lawfully  redeemed,  the  company  would 
be  placed  in  an  awkward  dilemma. 

§  79.     Other  Classifications. 

Under  the  New  York  statutes,  stock  may  be  and  is  classi- 
fied in  many  ways.  (G.  C.  L.,  §  20;  S.  C.  L..  §  47.)  The 
voting  right  may  be  denied  absolutely  to  certain  specified 
stock,  or  it  may  be  allowed  to  vote  only  on  certain  questions. 
Participation  in  dividends  may  be  limited  to  a  certain  percent- 
age in  each  year,  or  a  part  of  the  stock  may  be  denied  partici- 
pation in  the  distribution  of  assets  on  dissolution.  Other 
classifications  may  be  made  to  meet  varying  conditions. 

In  any  of  these  cases  the  conditions  under  which  any 
stock  is  issued  should  appear  plainly  on  the  face  of  its  certifi- 
cate, or,  if  too  lengthy  to  permit  of  this,  such  reference  should 
be  made  to  the  charter  in  which  the  conditions  are  set  forth 
as  to  put  an  intending  purchaser  on  his  guard. 

§  80.     Par  Value  of  Shares. 

This  must  not  be  less  than  $5  nor  more  than  $100.  (B. 
C.  L.,  §  2.)  This  par  value  may  be  changed  within  the  limits 


78  NEW    YORK    CORPORATIONS. 

stated  by  a  two-thirds  vote  of  the  stock  represented  at  a  special 
meeting,  held  and  conducted  in  the  same  manner,  and  upon 
filing  a  like  certificate,  as  required  for  the  increase  or  reduc- 
tion of  the  capital  stock.  (See  §  72;  also  Form  55.)  If  the 
change  is  authorized,  the  directors  issue  new  certificates  to 
the  par  value  of  the  old  in  exchange  therefor  and  cancel  these 
old  certificates.  (S.  C.  L.,  §  56.) 

Between  the  amounts  of  $5  and  $100  fixed  by  the 
statutes,  any  par  value  of  shares  may  be  adopted  which  the 
needs  of  the  company  suggest.  The  most  common  figures  are 
$10  and  $100. 

Shares  of  stock  in  the  same  company  may  be  classified  on 
the  basis  of  different  par  values,  as  a  par  value  of  $100  for  the 
common  stock  and  $10  for  the  preferred  .stock.  Such  an  ar- 
rangement is,  however,  unusual,  is  apt  to  be  confusing  and 
should  not  be  adopted  without  some  strong  reason  therefor. 

§  81.     Subscriptions. 

The  New  York  laws  impose  no  requirements  as  to  prelimi- 
nary subscription  to  the  capital  stock  of  a  proposed  corpora- 
tion, save  as  to  the  subscriptions  of  the  incorporators  which 
appear  in  the  charter.  The  company  is  therefore  fully  organ- 
ized when  the  certificate  is  duly  filed  and  recorded  and  the  tax 
paid.  (G.  C.  L..  §  5.)  Woods  Motor  Vehicle  Co.  v.  Brady, 
39  Misc.  79  (1902).  In  the  absence  of  any  statutory  direction 
regarding  preliminary  subscriptions,  the  Court  of  Appeals  has 
worked  out  a  distinction  between  an  agreement  to  form  a 
corporation  and  subscribe  to  its  stock,  and  an  agreement  to 
subscribe  for  shares  when  the  corporation  is  organized. 

Under  the  decisions  of  the  court,  a  preliminary  subscrip- 
tion made  in  the  first  form,  e.  g.,  "We  the  undersigned  hereby 
subscribe  for  the  number  of  shares  set  opposite  our  names," 
is  a  continuing  offer  which  may  be  accepted  upon  the  forma- 
tion of  the  company  since  "the  intention  of  the  parties  was  to 


CAPITAL  STOCK.  79 

become  shareholders  without  further  action  upon  their  part." 
Yonkers  Gazette  Co.  v.  Taylor,  30  App.  Div.  334  (1898). 

On  the  other  hand,  where  the  language  of  the  agreement 
indicates  an  intention  to  subscribe  "when  the  corporation  is 
organized"  or  upon  some  other  condition  (Lake  Ontario  R. 
R.  Co.  v.  Curtiss,  80  N.  Y.  219  [1880]),  further  action  is 
necessary  on  the  part  of  the  proposed  subscribers  to  make  them 
stockholders. 

In  the  first  case  the  subscription  may  be  modified  or  with- 
drawn at  any  time  before  acceptance,  but  if  not  changed  (Burt 
v.  Farrar,  24  Barb.  518  [1857]),  ^  mav  be  accepted  by  the 
corporation  when  organized  and  then  at  once  becomes  a  bind- 
ing contract  between  the  parties.  In  the  second  case,  the 
preliminary  subscription  is  little  more  than  a  memorandum 
which  must  be  ratified  by  both  parties  after  incorporation 
before  it  becomes  binding. 

In  the  matter  of  changes  in  the  terms  of  subscription 
agreements  it  has  been  held  that  even  if  the  terms  of  the  pre- 
liminary agreement  are  changed  in  the  charter  as  accepted  by 
the  Secretary  of  State,  it  will  not  release  a  subscriber  under  the 
agreement,  unless  the  changes  are  material  in  their  nature; 
"When  the  business  is  not  changed,  or  the  party  is  not  shown 
to  be  prejudiced  and  no  fraud  intervenes,  there  exists  no  sound 
basis  for  being  relieved  from  the  contract  whose  substance  is 
fully  performed."  Yonkers  Gazette  Co.  v.  Taylor,  supra,  p. 
338.  In  the  case  cited  a  change  of  name  was  held  immaterial. 

"  If  the  whole  capital  stock  shall  not  have  been  sub- 
scribed at  the  time  of  filing  the  certificate  of  incorporation,  the 
directors  named  in  the  certificate  may  open  books  of  subscrip- 
tion to  fill  up  the  capital  stock,  in  such  places  and  after  giving 
such  notices  as  they  may  deem  expedient,  and  may  continue 
to  receive  subscriptions  until  the  whole  capital  stock  is  sub- 
scribed." (S.  C.  L.,  §  41.)  This  is  a  mere  statutory  declara- 
tion of  the  common  law  power  of  directors  to  accept  stock 
subscriptions.  Buffalo  &  Jamestown  Ry.  v.  Gifford,  87  N.  Y. 


8O  NEW    YORK    CORPORATIONS. 

294,  300  (1882).  "The  section  may  have  been  drawn  by  the 
person  who  prepared  the  statute,  without  a  definite  idea  of  its 
utility  or  necessity.  It  does  not  prohibit  or  forbid  any  other 
mode  of  subscription  and  we  are  inclined  to  the  opinion  that 
it  was  not  intended  by  this  section  to  prescribe  a  fixed  statu- 
tory mode  of  making  a  subscription  and  that  any  contract  of 
subscription  good  and  valid  at  common  law  is  still  valid,  not- 
withstanding this  section."  (Id.) 

It  is  further  provided  (S.  C.  L.,  §  41),  that  "at  the  time 
of  subscribing  every  subscriber,  whose  subscription  is  payable 
in  money,  shall  pay  to  the  directors  ten  per  centum  upon  the 
amount  subscribed  by  him  in  cash  and  no  such  subscription 
shall  be  received  or  taken  without  such  payment." 

This  provision  for  payment  applies  only  to  subscriptions 
subsequent  to  organization.  South  Buffalo  Gas  Co.  v.  Bain, 
9  Misc.  425  (1894)  ;  United  Growers  Co.  v.  Eisner,  22  App. 
Div.  i,  4  (1897).  It  is  mandatory  as  to  the  latter  and  a 
subscription  upon  which  payment  is  not  made  is  valid  for  no 
purpose,  not  even  to  subject  the  alleged  stockholder  to  liability 
to  creditors.  Perry  v.  Hoadley,  19  Abb.  N.  C.  76  (1887); 
South  Buffalo  Gas  Co.  v.  Bain,  supra.  Payment  need  not 
accompany  the  subscription  but  must  be  made  within  a  rea- 
sonable time.  "The  intent  of  the  section,  doubtless,  was  that 
no  subscription  should  be  valid  until  ten  per  cent,  was  paid 
thereon,  and  not  that  it  should  be  invalid  if  a  short  interval 
occur  between  the  actual  subscription  and  the  payment  of  the 
money."  Black  River  and  Utica  Ry.  v.  Clarke,  25  N.  Y.  208, 
210  (1862)  ;  South  Buffalo  Gas  Co.  v.  Bain,  supra.  A  note, 
accepted  by  the  directors  as  payment  of  the  ten  per  cent,  and 
afterwards  enforced  by  them,  is  sufficient  compliance  with  the 
statute.  Ry.  Co.  v.  Wolley,  i  Keyes  118  (1864).  A  check, 
if  duly  paid,  is  sufficient,  but  a  check  upon  which  payment  is 
stopped  is  not  enough  to  render  the  subscription  binding.  Ex- 
celsior Co.  v.  Stayner,  25  Hun  91  (1881).  A  certified  check 


CAPITAL  STOCK.  8l 

is  "cash"  within  the  meaning  of  the  statute.    Matter  of  Staten 
Id.  R.  T.  Co.,  37  Hun.  422  (1885). 

§  82.     Stock  Certificates. 

"The  stock  of  every  stock  corporation  shall  be  represented 
by  certificates  prepared  by  the  directors  and  signed  by  the 
president  or  vice-president  and  secretary  or  treasurer  and  seal- 
ed with  the  seal  of  the  corporation  *  *  *  (S.  C.  L., 
§  40. )  The  issue  of  stock  certificates  is  in  no  sense  a  transfer 
of  stock.  Christensen  v.  Eno.,  106  N.  Y.  97  (1887)  ;  Burrall 
v.  Ry.,  75  N.  Y.  211  (1878).  "The  certificate  is  simply  a 
written  acknowledgment  by  the  company  of  the  interest  of 
the  subscriber  in  its  property  and  franchises."  Burr  v.  Wil- 
cox,  22  N.  Y.  551,  555  (1860)  ;  Kent  v.  Mining  Co.,  78  N.  Y. 
180  (1879). 

A  stockholder's  rights  do  not  depend  upon  the  issue  of  a 
certificate  (Rutter  v.  Kilpatrick,  63  N.  Y.  604,  606  [1876]  and 
cases  there  cited),  nor  upon  its  continued  existence.  The 
certificate  is  merely  a  convenient  evidence  of  his  interest  in 
the  company,  which  is  not  affected  by  the  loss  or  destruction 
of  the  certificate.  This  latter  has  none  of  the  qualities  of  ne- 
gotiable paper.  Weaver  v.  Barden,  49  N.  Y.  286  (1872); 
Driscoll  v.  West  Bradley  Co.,  59  N.  Y.  96,  105  (1874).  Its 
legal  assignment  will  convey  title,  but  it  is  well  settled  that 
an  unauthorized  transfer,  if  there  has  been  no  such  negligence 
or  conduct  on  the  part  of  the  owner  as  to  estop  him  to  deny 
authority,  conveys  no  title,  even  to  an  innocent  purchaser  for 
value.  McNeil  v.  Bank,  46  N.  Y.  325  (1871)  ;  Bank  v.  Ry., 
137  N.  Y.  231,  238  (1893)  ;  Knox  v.  Eden  Musee  Co.,  148 
N.  Y.  441,  456  (1896). 

A  certificate  of  stock  is,  however,  a  representation  to 
the  world  that  the  holder  has  a  certain  interest  in  the  capital 
of  the  company  and,  if  wrongfully  issued  by  an  authorized 
officer,  the  company  is  liable  to  an  innocent  holder.  If  the 
stock  could  have  been  legally  issued,  this  latter  becomes  /a 


82  NEW    YORK    CORPORATIONS. 

stockholder,  but  if  the  limit  of  authorized  capitalization  had 
been  reached,  he  can  recover  damages  only.  N.  Y.  and  N. 
H.  Ry.  v.  Schuyler,  34  N.  Y.  30  (1865).  Certificates  may  be 
issued  for  partly  paid  stock  if  express  provision  to  that  effect 
is  contained  in  the  original  or  amended 'charter  and  dividends 
may  be  declared  on  the  basis  of  the  amount  paid.  (S.  C.  L., 
§  62.)  The  sums  actually  paid  on  such  stock  should  appear 
plainly  on  the  face  of  the  certificates.  (See  §  93.) 

§  83.     Lost  and  Destroyed  Certificates. 

Though  a  stockholder's  certificate  be  unissued,  lost, 
stolen  or  destroyed,  he  is  still  entitled  to  every  right  of  a  stock- 
holder. The  stock  books  are  sufficient  evidence  of  his  owner- 
ship, and  the  absence  of  his  certificate  does  not  affect  his  right 
as  an  owner  of  stock. 

If  the  owner  of  a  certificate  which  has  been  lost  or  de- 
stroyed wishes  a  new  certificate,  he  may  apply  to  the  company 
for  a  duplicate  and,  if  refused,  may  petition  the  Supreme  Court 
at  special  term  to  compel  the  company  to  issue  the  same. 
Upon  due  proofs  of  the  facts,  an  order  will  be  made  requiring 
the  petitioner  (unless  a  municipal  corporation)  to  deposit 
security  with  the  company  and  the  latter  to  replace  the  missing 
certificate.  (S.  C.  L.,  §§  50,  51;  L.  1905,  Ch.  35.)  Kinnan 
v.  Ry.,  140  N.  Y.  183  (I893).1  Generally,  by  provision  of 
the  by-laws,  the  issuance  of  certificates  to  replace  those  lost  is 
placed  in  the  discretion  of  the  directors.  It  is  usually  stipu- 
lated, however,  that  the  directors  shall  exact  a  bond  of  indem- 
nity before  a  lost  certificate  is  replaced. 

§  84.     Consideration  for  Issue. 

"No  corporation  shall  issue  either  stock  or  bonds  except 
for  money,  labor  done  or  property  actually  received  for  the  use 

1  As  to  what  must  be  proven  to  entitle  the  petitioner  to  the  order, 
see  Matter  of  Blglln  v.  Ass'n..  46  Hun  223  (1887);  Matter  of  Coats,  75 
App.  Div.  469  (1902). 


CAPITAL  STOCK.  83 

and  lawful  purposes  of  such  corporation."  (S.  C.  L.,  §42.) 
To  issue  stock  as  fully  paid  when  in  fact  it  does  not  represent 
value  received,  is  a  fraud  upon  the  corporation  and  upon  sub- 
sequent takers  in  good  faith.  Barnes  v.  Brown,  80  N.  Y. 
527,  534  (1880).  The  effect  of  this  salutary  rule  is,  however, 
weakened  by  the  further  provision  of  the  statutes  that  in  issu- 
ing stock  for  property  the  judgment  of  the  directors  as  to  its 
value  is  conclusive  unless  actual  fraud  can  be  shown  (S.  C. 
L.,  §  42),  and  that  so  far  as  the  corporation  and  its  stock- 
holders are  concerned  stock  so  issued  is  full  paid  and  not  liable 
to  further  calls. 

This  provision  gives  the  directors  wide  discretion  in  the 
exchange  of  stock  for  property.  If,  however,  their  valuation 
in  any  case  is  grossly  excessive,  it  is  strong  evidence  of  fraud 
and  the  court  will  intervene  in  a  proper  case.  (See  §§  46,  50.) 

"  Lawful  purposes,"  as  used  in  the  statutes,  is  interpreted 
to  mean  those  not  foreign  to  the  business  of  the  corporation 
and  is  liberally  construed.  Rafferty  v.  Gas  Co.,  37  App.  Div. 
618,  621  (1899). 

§  85.     Calls  for  Subscription  Installments. 

"Subscriptions  to  the  capital  stock  *  *  *  shall  be 
paid  at  such  times,  and  in  such  installments,  as  the  board  of 
directors  may  by  resolution  require."  (S.  C.  L.,  §  43.)  A 
subscriber  who  fails  to  pay  when  the  installment  falls  due  is 
properly  chargeable  with  interest.  Gould  v.  Oneonta,  71  N. 
Y.  298,  305  (1877).  After  the  expiration  of  sixty  days  from 
the  service  on  a  defaulting  stockholder,  personally  or  by  mail, 
of  written  notice  requiring  him  to  make  the  payment  due  with- 
in sixty  days  at  a  specified  place,  and  stating  that  upon  his 
failure  to  do  so  his  stock  and  the  payment  thereon  will  be 
forfeited,  the  directors  may  declare  the  stock  on  which  default 
is  made,  together  with  all  previous  payments  thereon,  for- 
feited to  the  corporation.  (S.  C.  L.,  §43.)  Mitchell  v. 


84  NEW    YORK    CORPORATIONS. 

Mining  Co.,  40  N.  Y.  Supr.  Ct.  406  (1875)  ;  67  N.  Y.  280 
(1875).  When  stock  is  forfeited,  the  former  holder  is  under 
no  liability  for  further  calls  (Mills  v.  Stewart,  41  N.  Y.  384, 
389  [1869]),  nor  is  he  liable  for  the  unpaid  installments  due 
on  calls  already  made.  Small  v.  Herkimer  Co.,  2  N.  Y.  330 
(1849).  Forfeited  stock  may  be  reissued.  If  not  sold  for  its 
par  value,  or  subscribed  for  within  six  months,  it  must  be 
cancelled  and  deducted  from  the  amount  of  capital  stock.  If 
by  such  cancellation  the  amount  of  outstanding  stock  is  reduced 
below  the  minimum  required  by  law  ($500),  it  must  be  raised 
to  the  statutory  amount  within  three  months,  or  an  action  may 
be  brought  to  close  up  the  corporate  business  as  in  case  of 
insolvency.  (S.  C.  L.,  §  43.)  At  any  time  before  sale  of 
the  forfeited  shares,  the  original  stockholder  may  redeem 
them  by  payment  of  calls  and  interest.  Mitchell  v.  Mining 
Co.,  supra.1 

§  86.     Increase  or  Decrease. 

Increase  or  decrease  of  capital  stock  to  not  less  than 
the  minimum  prescribed  by  law  may  be  effected  by  charter 
amendment.  (S.  C.  L.,  §§  44-46.)  (See  §  72;  Form  55.) 

If  the  unanimous  written  consent  of  the  stock  is  obtained 
to  the  proposed  change  no  stockholder's  meeting  is  necessary, 
but  the  consent  so  given  must  be  entered  on  the  corporate 
minutes  and  be  filed  as  stated  on  the  following  page. 

The  change  may  be  effected,  without  unanimous  consent, 
by  a  majority  vote  in  interest  of  the  outstanding  stock,  called 
on  notice  stating  the  time,  place  and  object  of  the  meeting 
and  the  amount  of  the  proposed  increase  or  reduction,  signed 
by  the  president  or  a  vice-president  and  a  secretary,  published 
once  a  week  for  two  successive  weeks  in  a  newspaper  in  the 
county  where  its  principal  business  office  is  located,  if  there 

1  As  to  liability  for  calls  after  transfer  of  stock,  see  Plank  Road  Co. 
v.  Thatcher,  11  N.  Y.  102  (1854);  Rosevelt  v.  Brown,  11  N.  Y.  148  (1854); 
Tucker  v.  Oilman,  121  N.  Y.  189  (1890). 


CAPITAL  STOCK.  85 

is  such  a  paper,  and  also  mailed  to  each  stockholder  two  weeks 
before  the  meeting  or  served  personally  at  least  five  days 
before.  The  chairman  and  secretary  of  such  meeting  must 
be  chosen  from  among  the  stockholders. 

If  the  proposed  change  is  adopted  either  by  unanimous 
written  consent  or  at  a  special  meeting  by  a  vote  of  the  ma- 
jority of  the  whole  stock,  a  certificate  of  the  proceedings, 
showing  compliance  with  the  statutory  provisions,  must  be 
"made,  signed,  verified  and  acknowledged"  in  duplicate  by 
the  chairman  and  secretary  of  the  meeting,  or,  in  the  case  of 
unanimous  consent,  by  the  president  and  secretary  of  the  com- 
pany, and  one  copy  be  filed  in  the  office  of  the  clerk  of  the 
county  where  the  principal  office  is  located  and  the  other  copy 
be  filed  with  the  Secretary  of  State.  (See  Form  55.)  This 
certificate  must  set  forth : 

(1)  The  amount  of  authorized  capital. 

(2)  The  proportion  thereof  actually  issued. 

(3)  The  amount  of  increase  or  reduction. 

(4)  In  case  of  reduction  the  whole  amount  of  the 
ascertained  debts  and  liabilities. 

A  tax  of  one-twentieth  of  one  per  cent,  must  be  paid  on 
any  increase  of  stock.  The  old  stockholders  have  a  right  to 
purchase  the  new  stock  pro  rata  before  it  may  be  offered  to 
outside  investors.  Matter  of  Wheeler,  2  Abb.  Prac.  N.  S. 
361,363  (1866). 

In  case  of  reduction  the  certificate  must  before  filing  be 
endorsed  by  the  state  comptroller  to  the  effect  that  the  reduced 
capital  is  sufficient  for  the  proper  purposes  of  the  corporation 
and  is  in  excess  of  its  ascertained  debts  and  liabilities.  The 
comptroller's  fee  is  $i.  (Executive  Law,  §  32.)  If  stock 
is  reduced,  the  meeting  or  the  written  consent  may  provide 
for  a  distribution,  pro  rata  among  the  stockholders,  of  the 
amount  of  capital  released  by  such  reduction  of  stock.  (For 
fees,  see  "Table  of  Fees,"  page  347.) 


86  NEW    YORK    CORPORATIONS. 

§  87.     Transfer  of  Stock. 

"A  transfer  of  shares  in  a  corporation  means  substitution 
of  a  new  shareholder  in  place  of  an  outgoing  shareholder  in 
the  company,  and  an  assumption  by  the  former  of  all  the 
rights  and  obligations  which  attached  to  the  transferring 
shareholder  by  reason  of  his  ownership  of  the  shares."  Mora- 
wetz  Private  Corp.,  §  159;  Tucker  v.  Oilman,  121  N.  Y.  189 
(1890).  Subject  to  the  statutory  provisions  regulating  trans- 
fers, as  noted  hereinafter,  a  corporation  may  prescribe  in  its 
by-laws  the  method  by  which  stock  may  be  transferred.  (S. 
C.  L.,  §  40.)  This  does  not  give  the  corporation  power  to 
prohibit  transfers  or  to  abridge  the  right  to  transfer,  which  is 
one  of  the  chief  attributes  of  corporate  stock  (Rochester  Land 
Co.  v.  Raymond,  158  N.  Y.  576,  583  [1899]),  but  simply  to 
direct  the  manner  in  which  it  shall  be  done.  Driscoll  v.  West . 
Bradley  &  C.  M.  Co.,  59  N.  Y.  96,  104  (1874)  ;  Kinnan  v. 
Sullivan  Co.  Club;  26  App.  Div.  213,  216  (1898).  (See  §  91, 
subdiv.  d.) 

No  share  of  stock  is  transferable  until  all  previous  calls 
thereon  have  been  fully  paid.  (S.  C.  L.,  §  40.)  It  is  not  at  all 
essential  to  transferability,  however,  that  stock  should  have 
been  fully  paid  for.  Rochester  Land  Co.  v.  Raymond,  supra. 
If  all  calls  have  been  satisfied,  it  may  be  transferred  freely, 
even  though  the  full  amount  due  on  the  subscription  has  not 
been  paid.  In  such  case,  all  liability  of  the  original  subscriber 
ceases  as  soon  as  the  transfer  is  registered  by  the  company 
and  the  purchaser  is  liable  for  subsequent  calls.  Id. 

Transfer  or  delivery  of  the  certificate  with  assignment 
and  power  of  transfer  is  perfectly  valid  as  between  the  parties 
and  passes  the  title  both  legal  and  equitable.  Shellington  v. 
Rowland,  53  N.  Y.  371  (1873);  Bank  v.  Colwell,  infra. 
In  this  manner  certificates  may  be  rendered  practically  nego- 
tiable instruments,  for  it  is  well  settled  that  an  assignment 
may  be  executed  in  blank  and  the  certificate  so  assigned  pass 


CAPITAL  STOCK.  87 

from  hand  to  hand  any  number  of  times,  the  assignment  when 
filled  up  by  the  last  holder  and  registered  on  the  books  of  the 
company,  vesting  the  ownership  of  the  shares  in  him.  Kort- 
nght  v.  Bank,  20  Wend.  91  (1838);  McNeil  v.  Bank,  46 
N.  Y.  325  (1871). 

The  statutes,  however,  provide  (S.  C.  L.,  §  29),  that 
transfers  are  not  valid  as  against  the  corporation,  its  stock- 
holders and  creditors  for  any  purpose  except  to  render  the 
transferee  liable  for  corporate  debts  to  the  same  extent  as  the 
original  owner,  until  the  transfer  is  entered  on  the  books  of  the 
company.  This  provision  is,  however,  intended  solely  for  the 
protection  of  the  corporation  and  may  be  waived  or  asserted  at 
pleasure.  Bank  v.  Colwell,  132  N.  Y.  250,  256  (1892)  and 
cases  there  cited.  If  the  provision  is  not  waived  the  vendor 
remains  the  nominal  owner  until  the  transfer  is  entered  on  the 
books,  and  until  such  entry  is  made,  both  he  and  the  vendee  are 
liable  to  creditors.  The  vendor  if  compelled  to  pay  may  re- 
cover indemnity  from  the  vendee.  Johnson  v.  Underbill,  52 
N.  Y.  203,  209  (1873). 

The  corporation  may  reserve  a  lien  upon  the  shares  of  its 
stockholders  for  debts  due  to  it  from  the  owners,  by  printing 
on  the  certificates  a  copy  of  the  statute  under  which  this  lien 
is  established.  (S.  C.  L.,  §  26.)  The  lien  cannot  be  created 
by  a  by-law.1  Driscoll  v.  Mfg.  Co.,  59  N.  Y.  96  (1874); 
Rochester  Land  Co.  v.  Raymond,  158  N.  Y.  576  (1899). 

The  statutes  provide  that  no  stockholder  shall  transfer 
his  stock  in  contemplation  of  insolvency.  An  attempted  trans- 
fer in  violation  of  this  provision  is  void.  (S.  C.  L.,  §48.) 
It  has  been  decided  that  this  provision  was  enacted  to  prevent 
a  stockholder  evading  his  statutory  liabilities  to  the  corpora- 
tion and  its  creditors  and  that  consequently,  where  the  stock 
is  full  paid,  a  bona  fide  sale  is  valid  even  when  made  with 

1  As   to   what    constitutes   waiver   of   the   lien   of   the   corporation,    see 
Bank  v.  Bank,   105   U.   S.   217    (1881). 


88  NEW    YORK    CORPORATIONS. 

knowledge  of  impending  insolvency.  Sinclair  v.  Fuller,  75 
N.  Y.  St.  641  (1896);  158  N.  Y.  607  (1899). 

The  language  of  the  New  York  statute  of  frauds,  which 
includes  "choses  in  action,"  renders  a  contract  for  the  sale  of 
shares  to  the  value  of  over  $50  unenforceable  unless  in  writ- 
ing. (Personal  Prop.  Law,  §  21,  subdiv.  6.) 

A  transfer,  after  dissolution  of  the  corporation,  operates 
simply  as  an  equitable  assignment.  James  v.  Woodruff,  10 
Paige  541  (1843). 

(For  tax  on  transfers,  see  §§  151,  152;  forged  and  un- 
authorized transfers,  §  82 ;  rights  of  transferor  and  trans- 
feree to  dividend,  §  88. ) 

§  88.     Dividends. 

It  is  a  fundamental  rule  of  corporation  law  that  dividends 
are  payable  only  from  profits.  The  New  York  statute  express- 
ly provides  that  "the  directors  of  a  stock  corporation  shall  not 
make  dividends,  except  from  the  surplus  profits  arising  from 
the  business  of  such  corporation,  nor  divide,  withdraw  or  in 
any  way  pay  to  the  stockholders  or  any  of  them,  any  part  of 
the  capital  of  such  corporation  or  reduce  its  capital  stock 
except  as  authorized  by  law."  (S.  C.  L.,  §  23.)  Violation  of 
this  section  renders  directors  under  whose  administration  it 
happens  personally  liable  to  the  corporation  and  to  the  credi- 
tors, unless  they  cause  their  dissent  to  be  entered  at  large  upon 
the  minutes.  (Id.)  They  are  also  guilty  of  a  misdemeanor. 
(Pen.  Code,  §  594;  Code  Civil  Proc.,  §§  1781-3,  1790-6.) 
(See  §§  123,  124.) 

The  practical  difficulty  of  determining  what  are  profits 
is  sometimes  great  where  corporate  operations  are  at  all  com- 
plicated, but  the  rule  is  invariable  that  "the  surplus  over  and 
above  the  capital  and  debts  becomes  profits."  Barry  v.  Mer- 
chants Exchange  Co.,  i  Sandf.  Ch.  307  (1843);  Berwind- 
White  Coal  Co.  v.  Ewart,  n  Misc.  490  (1895). 


CAPITAL  STOCK.  89 

When  a  corporation  has  a  surplus,  it  rests  in  the  fair  and 
honest  discretion  of  the  directors,  uncontrollable  by  the  courts, 
whether  a  dividend  shall  be  declared  and,  if  made,  how  much 
it  shall  be  and  when  and  where  it  shall  be  payable.  Williams 
v.  Telegraph  Co.,  93  N.  Y.  162,  192  (1883)  ;  Burden  v.  Bur- 
den, 159  N.  Y.  287  (1899).  This,  however,  does  not  obtain 
in  the  case  of  dividends  due  on  preferred  stock  at  a  certain 
time.  In  such  case  the  directors  have  no  discretion  in  the 
matter,  but,  given  the  profits  from  which  the  dividend  may 
be  paid,  must  declare  it  at  the  due  date. 

Where,  however,  bad  faith  can  be  shown  and  the  directors 
refuse,  without  reasonable  cause,  to  declare  a  dividend,  the 
interposition  of  the  courts  may  be  had  to  compel  a  fair  divi- 
dend, for  corporate  profits  properly  belong  to  the  shareholders 
and  they  are  entitled  to  an  honest  administration  of  them. 
Hiscock  v.  Lacy,  9  Misc.  578  (1894).  The  surplus  may  be 
in  cash  and  divided  as  such,  or  it  may  be  in  property  and  if 
the  property  is  so  situated  that  a  division  thereof  among  the 
stockholders  is  practicable,  a  property  dividend  may  be  de- 
clared and  distributed.  Williams  v.  Telegraph  Co.,  93  N.  Y. 
162,  189  (1883). 

It  is  possible,  too,  to  issue  a  stock  dividend.  To  justify 
it,  the  company  must  have  authority  to  issue  the  amount  of 
stock  necessary,  and  should  have  sufficient  actual  capital  in 
property  in  excess  of  the  par  value  of  the  capital  stock  then 
outstanding,  to  represent  the  amount  of  share  capital  issued 
as  dividends.  In  such  case  the  surplus  is  preserved,  secure 
and  undivided  for  the  benefit  of  the  corporate  creditors  and 
no  one  is  injured.  William  v.  Telegraph,  supra,  p.  191 ;  Merz  v. 
Conduit  Co.,  87  Hun  430  (1895)  ;  Morawetz  Private  Corp., 

§453- 

Dividends  are  payable  to  the  stockholder  of  record,  or 
his  legal  representative,  at  the  time  they  are  declared,  without 
reference  to  the  time  when  they  were  earned.  Jones  v.  Ry., 
57  N.  Y.  196  (1874)  ;  Jermain  v.  Ry.,  91  N.  Y.  483  (1883). 


90  NEW    YORK    CORPORATIONS. 

In  paying  dividends  the  corporation  is  justified  in  relying  on 
its  books  and  need  not  demand  the  production  of  the  certifi- 
cate. Brisbane  v.  Ry.,  94  N.  Y.  204  (1883).  The  rights  of 
equitable  assignees  will,  however,  be  protected  and  the  com- 
pany is  not  justified  in  the  payment  of  dividends  to  stock- 
holders of  record  if  it  has  due  notice  of  the  transfer  of  their 
rights.  Smith  v.  Coal  Co.,  7  Lans.  317,  321  (1873). 

Dividends  must  be  distributed  ratably  without  discrimi- 
nation. .Jones  v.  Ry.,  supra.  When  declared  they  cease  to  be 
a  part  of  the  corporate  assets  and  become  at  once  the  property 
of  the  stockholders.  Matter  of  Kernochan,  104  N.  Y.  618, 
624  (1887).  (For  rights  of  preferred  .stock  to  dividends,  see 
Section  76.) 


CHAPTER  IX. 
STOCKHOLDERS. 


§  89.     Creation  of  the  Relation. 

The  relation  of  stockholder  is  established  by  contract 
between  the  corporation  and  the  individual  seeking  member- 
ship. The  contract  may  be  original,  as  in  the  case  of  a  direct 
subscription  for  stock,  or  it  may  be  the  result  of  the  substi- 
tution which  takes  place  upon  a  transfer  of  stock.  As  already 
stated,  the  stock  certificate  is  a  mere  "muniment  of  title"  (see 
§  82),  and  the  fact  that  it  has  not  been  issued,  or  that  it  has 
been  lost  or  destroyed  does  not  affect  a  stockholder's  rights. 
The  issued  certificate  is  merely  a  convenient  evidence  of  a 
condition  already  existing. 

§  90.     Rights  of  Stockholders.     Collective. 

The  relation  between  a  corporation  and  its  stockholders 
is  practically  that  of  trustee  and  beneficiaries.1  The  corpora- 
tion has  the  legal  title  to  the  property,  but  the  shareholders 
are  entitled  to  have  it  managed  for  their  benefit  in  accordance 
with  the  charter  and  by-laws.  The  well  established  rule  of 
trusts,  that  when  a  trustee  is  invested  with  active  duties,  the 
beneficiary  will  not  be  allowed  to  sue  for  the  protection  of  the 
trust  unless  the  trustee  has  refused  or  is  unable  to  do  so  on 
his  behalf  (Western  Ry.  Co.  v.  Nolan,  48  N.  Y.  513  [1872]), 
applies,  with  peculiar  force,  to  the  case  of  a  corporation  and 

iBut  see  Karnes  v.  Ry.,  4  Abb.  Pr.  N.  S.  110  (1867). 

91 


Q2  NEW    YORK    CORPORATIONS. 

its  shareholders.  Morawetz  Private  Corporations,  §§  237, 
239.  The  directors  or  managing  agents  of  the  corporation 
are  clothed  with  wide  discretionary  power  in  the  matter  of 
corporate  suits  and  it  is  their  province  to  institute  litigation 
when  necessary.  The  stockholders,  whether  individually  or 
collectively,  have  no  such  right  unless  the  directors  fail  sig- 
nally in  this  duty.  Therefore,  before  a  stockholder  may  com- 
plain of  an  injury  done  to  the  corporation,  or  enforce  cor- 
porate rights,  it  must  be  shown  that  he  has  used  every  effort 
to  induce  the  corporation  itself  to  sue.  Vanderbilt  v.  Garrison, 
5  Duer  689  (1856);  Stromeyer  v.  Combes,  15  Daly  29 
(1888).  "It  would  be  a  doctrine  attended  with  very  serious 
consequences  if  every  individual  shareholder,  assuming  the 
place  of  the  corporation,  could  decide  for  it  when  action  should 
be  brought."  Samuel  v.  Holladay,  i  Wolw.  400  (U.  S.  C. 
Ct);  McNaughton  v.  Osgood,  41  Hun  109  (1886).  It  is1 
necessary  therefore  to  justify  the  individual  stockholder's  suit 
to  show  actual  bad  faith  in  the  refusal  of  the  proper  agents 
to  sue.  Roberts  v.  Ry.,  64  St.  Rep.  167  (1894);  Sage  v. 
Culver,  147  N.  Y.  241  (1895). 

The  collective  powers  of  the  stockholders  in  the  manage- 
ment of  the  corporation  have  already  been  indicated  in  con- 
nection with  the  various  subjects  with  which  the  stockholders 
are  concerned.  They  may  be  recapitulated  as  follows : 

(1)  To  adopt  or  amend  by-laws.     (G.  C.  L.,  §  n, 
subdiv.  5.)     (See  Chap.  IV,  "By-Laws.") 

(2)  To  elect  directors.     (G.  C.  L.,  §  n  ;  S.  C.  L., 
§20.)     (See  §  106.) 

(3)  To  amend  the  charter.     (See  §  72.) 

(4)  To    effect    dissolution.       (S.    C.    L.,    §  57.) 
(See  §  56.) 

(5)  To  control  the  following  acts  of  the  directors, 
all  of  which  must  receive  the  approval  of  the  stockholders 
before  consummation. 


STOCKHOLDERS.  93 

(a)  Mortgages.     All  propositions  to  mortgage  corpor- 
ate property,  either  real  or  personal,  must  be  submitted  to 
the  stockholders  and  receive  a  formal  vote  of  two-thirds  in 
interest.     (S.  C.  L.,  §  2.)     (See  §  67.) 

(b)  Conversion  of  Obligations  into  Stock.     Directors 
may  confer  on  holders  of  corporate  obligations  the  right  to 
convert  them  into  stock  only  with  the  approval  of  two-thirds 
of  the  stock.     (See  §  67.) 

(c)  Sale  of  Property  and  Franchise.     All  transactions 
involving  the  sale  of  the  entire  corporate  property  and  fran- 
chises to  a  domestic  corporation,  require  a  two-thirds  vote  of 
the  stock  for  validation.     If  the  property  is  in  an  adjoin- 
ing state  and  the  sale  is  made  to  a  corporation  of  the  state 
where  it  is  located,  a  vote  of  ninety-five  per  cent,  is  necessary. 
(S.  C.  L.,  §33.) 

(d)  To  Guarantee  Bonds.     The  stockholders  must  ap- 
prove a  proposition  to  guarantee  the  bonds  of  another  cor- 
poration before  it  can  be  carried  out  by  the  directors.     If  all 
the  stock  of  the  corporation  aided  is  owned  by  the  corporation 
making  the  guaranty,  a  two-thirds  vote  of  the  stock  is  suffi- 
cient, otherwise  consent  must  be  unanimous.     (S.  C.  L.,  §  40.) 
(See  §68.) 

(e)  Consolidation.     Consolidation  with  other  corpora- 
tions requires  the  consent  of  two-thirds  of  the  stock.      (B. 
C.  L.,  §9.)     (See  §70.) 

(f)  Renewal.     Extension  of  corporate  existence  can  be 
affected  only  with  the  assent  of  two-thirds  of  the  stock.     (G. 
C.  L.,  §32.)     (See  §54.) 

§  91.     Rights  of  Stockholders.     Individual. 

An  action  to  protect  the  rights  of  the  individual  member 
as  distinguished  from  those  of  the  corporation  must  be 
brought  by  the  stockholders.  Meyers  v.  Scott,  20  St.  Rep.  35 


94  NEW    YORK    CORPORATIONS. 

(1888).  The  rights  of  a  stockholder,  infringement  of  which 
may  be  redressed  in  New  York  by  suit  brought  in  his  indi- 
vidual capacity,  are  as  follows : 

(a)  Right  to  Notice;  Voting.     To  be  notified  of  elec- 
tions, and  to  vote  thereat,  in  person  or  by  proxy.     For  depri- 
vation of  this  right,  the  injured  stockholder  may  sue  to  have 
any  corporate  action  taken  at  such  meeting  declared  void. 
People  v.  Albany  Ry.,  55  Barb.  344  (1869);  People  ex  rel 
Loew  v.  Batchelor,  22  N.  Y.  128,  134  (1860).     (See  §  103.) 

(b)  Dividends.     To  share  proportionately  in  dividends. 
When  a  dividend  has  been  declared  it  becomes,  ipso  facto, 
the  property  of  the  shareholders  pro  rata  and  any  one  of  them 
may  sue  for  his  share  if  not  paid.     If,  however,  the  directors 
wrongfully  fail  to  declare  a  dividend,  the  injury  is  to  the 
stockholders  collectively,   and  the  remedy  must  be  obtained 
through  the  corporation.     (See  §  88.)     The  courts  will  inter- 
fere at  the  instance  of  a  stockholder  to  secure  a  fair  distribu- 
tion of  profits   (Luling  v.  Ins.  Co.,  45  Barb.   510   [1866]), 
and  a  holder  of  preferred  stock  may  enforce  his  preferential 
rights  in  the  same  manner.    Boardman  v.  Ry.,  84  N.  Y.  157, 
1 80  (iSSi).1 

(c)  Stock  Certificates.     A  stockholder  is  entitled  to  a 
stock  certificate  and  under  proper  conditions,  to  have  it  re- 
placed in  case  of  loss.     (See  §  83.)     Although  his  rights  as 
stockholder  do  not  depend  upon  his  possession  of  such  a  cer- 
tificate, he  is  entitled  to  it  as  evidence  of  those  rights  and  to 
facilitate  their  transfer.     (See  §  82.) 

(d)  Transfer   of   Stock.     The    individual    stockholder 
may  freely  transfer  his  shares  and  can  force  the  corporation 
to  register  the  transfer.     Dunn  v.  Ins.  Co.,  19  W.  Dig.  531 
( 1884).    He  cannot  be  deprived  of  this  right  by  by-law  under 
the  provision  allowing  corporations  to  regulate  stock  trans- 
fers in  their  by-laws.     The  corporation  is,  however,  allowed 

lSee  also  Hiscock  v.  Lacy,  9  Misc.   578,   593    (1894). 


STOCKHOLDERS.  95 

to  close  the  transfer  book  and  refuse  to  register  changes  of 
ownership  for  forty  days  prior  to  any  annual  or  special  meet- 
ing, if  a  by-law  to  that  effect  is  regularly  adopted.  (G.  C. 
L.,  §20.)  (See  §87.) 

(e)  Inspection  of  the  Corporate  Books  and  Records. 
A  stockholder  is  entitled  to  a  certain  supervisory  right  over 
the  corporate  affairs  to  enable  him  to  properly  protect  his  in- 
terests and  must  be  allowed,  when  necessary,  to  examine  the 
corporate  records  for  this  purpose.     The  stock  book  contain- 
ing a  list  of  stockholders  and  transfers  must  be  kept  open  for 
his  inspection  for  three  hours  each  business  day  and  he  may 
make  extracts  for  future  use.     (S.  C.  L.,  §  29.)     (See  §§  136, 
137.)     Also  any  voting  trust  agreements  must  be  kept  on  file 
at  the  company's  principal  office  and  open  to  his  inspection 
during  business  hours.     (G.  C.  L.,  §  20.)    The  same  is  true  of 
the  financial  statements  rendered  by  the  treasurer  on  request 
of  the  stockholders  entitled  to  demand  it.     (S.  C.  L.,  §  52.) 
(See  subdiv.  f  below.) 

These  express  provisions  do  not  deprive  the  stockholder 
of  his  common  law  right  to  obtain  a  court  order  for  the  ex- 
amination of  any  other  of  the  corporate  records  where  he  can 
show  that  such  a  privilege  is  necessary  to  properly  protect  his 
rights.  Matter  of  Sage,  70  N.  Y.  220  (1877);  Matter  of 
Steinway,  31  App.  Div.  70,  73  (1898).  (See  §  137.) 

Upon  a  refusal  to  permit  an  inspection  of  the  books,  in 
a  case  where  the  stockholder  is  entitled  to  see  them,  he  may 
bring  mandamus  proceedings  and  secure  an  order  as  a  matter 
of  absolute  right.  People  ex  rel  McDonald  v.  U.  S.  M.  R. 
Co.,  20  Abb.  N.  C.  192  (1888). 

(f)  Financial  Statement.     Five  per  cent,  of  the  stock- 
holders, if  the  corporation  is  capitalized  at  an  amount  not  ex- 
ceeding $100,000,  or  three  per  cent,  if  over  that  sum,  not 
oftener  than  once  a  year,  may  demand  a  sworn  statement  from 
the  treasurer  showing  in  detail  the  corporate  assets  and  lia- 


96  NEW    YORK    CORPORATIONS. 

bilities.  This  report  must  be  prepared  and  delivered  to  the 
person  making  the  demand  within  thirty  days  thereof  and 
must  be  kept  on  file  at  the  office  of  the  corporation  for  twelve 
months  open  to  the  inspection  of  stockholders  during  business 
hours.  (S.  C.  L.,  §  52.)  French  v.  McMillan,  43  Hun  188 
(1887). 

(g)  Dissolution.  Under  certain  circumstances  a  stock- 
holder may  institute  proceedings  to  secure  dissolution  of  the 
corporation.  (Code  of  Civil  Proc.,  §§  1785-6.)  (See  §  56.) 

§  92.     Liability  of  Holders  of  Full  Paid  Stock. 

Full  paid  stock  is  that  for  which  the  company  has  received 
its  par  value  in  cash,  services  or  property  appraised  by  the 
directors  in  good  faith.  (S.  C.  L.,  §  42.)  Ordinarily  in  this 
state  the  only  liability  of  holders  of  full-paid  stock  is  to  em- 
ployees of  the  company,  though  the  additional  obligations  of 
stockholders  of  a  full  liability  company  may  be  obtained  if 
desired  by  the  procedure  set  forth  in  subdivision  b  of  this 
section. 

(a)  Liability  to  Employees.  Holders  of  full  paid  stock 
are  liable  for  debts  due  and  owing  to  laborers,  servants  or 
employees  other  than  contractors,  for  services  performed  by 
them  for  the  corporation.  (S.  C.  L.,  §  54.)  The  statute, 
being  penal  in  its  nature,  has  received  a  strict  construction. 
The  term  "employees"  has  been  defined  as  "those  employed 
in  subordinate  and  humble  capacities  and  to  whom  the  hard- 
ships would  be  great  if  their  wages  and  salaries  were  not 
promptly  paid."  To  these  only,  and  not  to  every  one  who  is 
engaged  by  a  corporation,  the  stockholders  are  liable.  Bris- 
tor  v.  Smith,  158  N.  Y.  157  (1899). 

This  liability  may  be  enforced  against  any  stockholder. 
In  order  to  take  advantage  of  his  rights  against  the  stock- 
holders an  employee  must,  within  thirty  days  after  termina- 
tion of  his  service,  notify  the  stockholder  or  stockholders  to 


STOCKHOLDERS.  97 

be  held,  in  writing,  of  his  intention  to  hold  him  or  them  liable. 
He  must  then  obtain  judgment  against  the  corporation  and 
have  execution  returned  unsatisfied.  After  this  he  may  bring 
action  against  the  stockholder,  but  must  begin  the  same  within 
thirty  days  from  that  time.  (S.  C.  L.,  §  54.) 

(b)  Full  Liability  Companies.  Full  paid  stock  may  be 
subjected  to  liability  to  general  corporate  creditors  if  express 
provision  to  that  effect  is  made  in  the  original  charter,  or  by 
amendment  passed  by  resolution  of  two-thirds  of  the  board  of 
directors  with  unanimous  written  consent  of  the  stockholders. 
The  certificate  of  any  such  amendment  must  be  signed  and 
acknowledged  by  the  president  and  treasurer  or  by  the  direc- 
tors be  accompanied  by  the  authorizing  resolution  and  consent 
and  be  filed  in  the  same  offices  as  the  original  certificate  of  in- 
corporation. The  stockholders  are  then  severally  liable  for 
all  corporate  debts  and  liabilities.  As  a  preliminary  to 
holding  any  such  stockholder,  judgment  must  be  obtained 
against  the  corporation  in  an  action  begun  within  two  years 
after  the  debt  became  due  and  execution  returned  unsatisfied. 
Adams  v.  Slingerland,  87  App.  Div.  312  (1903).  A  stock- 
holder who  pays  the  debt  is  entitled  to  contribution  pro  rata 
from  the  other  shareholders  and  may  recover  from  them  in 
a  joint  or  several  action.  (B.  C.  L.,  §  6.)  There  are  few 
full  liability  companies  in  the  state  since  they  lack  the  chief 
attractive  feature  of  the  ordinary  corporate  form. 

§  93.     Liability  of  Holders  of  Stock  Not  Full  Paid. 

"Every  holder  of  capital  stock  not  fully  paid,  in  any 
stock  corporation,  shall  be  personally  liable  to  its  creditors, 
to  an  amount  equal  to  the  amount  unpaid  on  the  stock  held 
by  him,  for  debts  of  the  corporation  contracted  while  such 
stock  was  held  by  him."  (S.  C.  L.,  §  54.) 

It  is  a  secondary  liability,  however.  Action  must  be 
begun  against  the  corporation  within  two  years  after  the  debt 


98  NEW    YORK    CORPORATIONS. 

falls  due,  and  execution  on  the  judgment  recovered  must  be 
returned  unsatisfied,  in  whole  or  in  part,  before  suit  may  be 
brought  against  the  stockholder.  The  time  limitation  of  the 
statute  will  be  excused  where  compliance  has  been  rendered 
impossible  by  law,  as  where  creditors  have  been  enjoined  in 
dissolution  proceedings.  Lang  v.  Lutz,  83  App.  Div.  534 
(1903).  The  debt  must  also  have  been  payable  within  two 
years  from  the  time  it  was  contracted  and  the  stockholders' 
liability  terminates  unless  action  is  brought  within  two  years 
after  he  ceases  to  be  a  stockholder.  (S.  C.  L.,  §  55.) 

§  94.     Personal  and  Representative  Liability. 

No  person  holding  stock  as  an  executor  or  administrator, 
guardian  or  trustee  is  personally  liable  as  a  stockholder  unless 
he  voluntarily  invested  the  trust  funds  in  the  stock  so  held. 
The  funds  in  the  hands  of  one  holding  in  any  of  such  repre- 
sentative capacities  are  liable  to  the  same  extent  as  the  testa- 
tor, intestate  ward  or  person  interested  in  the  trust  would  be 
if  alive  and  capable  of  acting.  A  pledger  of  stock  as  collateral 
security  is  considered  the  holder  thereof  and  is  liable  as  a 
stockholder.  (S.  C.  L.,  §  54.) 

§  95.     Relations  of  Stockholders  to  Each  Other. 

Stockholders  owe  no  duty  to  each  other  as  a  result  of 
their  relation.  As  such,  they  are  not  responsible  or  liable  in 
any  way  for  the  acts  of  the  other  stockholders  of  the  company. 
In  the  purchase  and  control  of  his  stock  each  acts  entirely  for 
himself  and  not  as  trustee  for  the  others.  Where,  however, 
a  majority  of  the  stockholders,  acting  in  bad  faith,  carry  into 
effect  a  scheme  which  even  if  lawful  on  its  face,  is  intended  to 
defraud  the  minority  of  their  rights,  the  courts  will  interfere. 
Flynn  v.  Ry.,  158  N.  Y.  493,  507  (1899)  ;  Farmers  Loan  & 
Trust  Co.  v.  Ry.,  150  N.  Y.  410  (1896).  (See  §  97.) 


STOCKHOLDERS.  99 

§  96.     Relations  of  Stockholders  to  the  State. 

The  New  York  courts,  while  recognizing  the  time-honor- 
ed doctrine  that  a  corporation  is  an  entity  apart  from  its  stock- 
holders, nevertheless  face  the  fact  squarely  that  the  abstract 
idea  of  a  corporation,  the  legal  entity,  is  itself  a  fiction  and 
that  the  state  gives  the  charter  "not  to  the  'almost  nebulous 
fiction  of  our  thought,'  but  to  the  corporators,  the  acting  and 
living  men  *  *  *  to  redound  to  their  benefit  and  add 
energy  to  their  capital."  People  v.  N.  R.  S.  R.  Co.,  121  N.  Y. 
582,  622  (1890).  Therefore  when  the  acts  of  the  stock- 
holders as  a  body  are  illegal,  "though  the  proceeding  by  infor- 
mation be  against  the  corporate  body,  it  is  the  acts  or  omis- 
sions of  the  individual  corporators  that  are  the  subject  of  the 
judgment  of  the  court"  in  such  a  case.  People  ex  rel  Bishop 
v.  K.  &  M.  T.  Ry.  Co.,  23  Wend.  193,  205  (1840) .* 

§  97.     Powers  of  the  Majority. 

Unless  a  greater  proportion  is  required  by  statute,  a  ma- 
jority of  the  stockholders,  when  acting  within  the  chartered 
powers  of  the  corporation,  may  bind  the  minority.  They  can 
not,  however,  so  exercise  their  powers  as  to  oppress  the  mi- 
nority or  defraud  them,  and  if  they  attempt  to  do  so  the  courts 
will  interfere,  at  the  suit  of  a  minority  stockholder.  Farmers 
Loan  &  Trust  Co.  v.  Ry.,  150  N.  Y.  410  (1896).  To  warrant 
such  interposition,  "a  case  must  be  made  out  which  plainly 
shows  that  such  action  is  so  far  opposed  to  the  true  interests 
of  the  corporation  itself  as  to  lead  to  the  clear  inference  that 
no  one  thus  acting  could  have  been  influenced  by  any  honest 
desire  to  secure  such  interests,  but  that  he  must  have  acted 
with  an  intent  to  subserve  some  outside  purpose,  regardless 
of  the  consequences  to  the  company,  and  in  a  manner  incon- 
sistent with  its  interests."  Gamble  v.  Water  Co.,  123  N.  Y. 
91,  99  (1890). 

1  This  case  contains  a  carefully  considered  discussion  of  this  subject 
and  a  clear  presentation  of  the  law  as  it  stands  in  New  York. 


IOO  NEW    YORK    CORPORATIONS. 

Where,  as  is  usually  the  case,  the  management  of  corpor- 
ate affairs  is  entrusted  to  the  board  of  directors  and  these  have 
the  usual  powers,  their  control  is  exclusive  and  not  even  a 
majority  of  the  stockholders  can  override  them.  McCullough 
v.  Moss,  5  Denio  575  (1846).  They  cannot  be  removed,  ex- 
cept for  improper  use  of  their  powers,  they  need  not  obey  the 
instructions  of  the  stockholders  and  the  only  remedy  in  event 
of  dissatisfaction  is  to  await  the  next  annual  meeting  and 
elect  new  directors.  If  desired,  however,  the  powers  and 
tenure  of  office  of  the  directors  may  be  abridged  or  modified 
by  proper  charter  or  by-law  provision.  This,  however,  is  but 
seldom  done.  (See  §  26.) 

§  98.     Voting  Trusts. 

The  statutes  provide  that  any  stockholder  may,  by  writ- 
ten agreement,  transfer  his  stock  to  one  or  more  persons  for 
the  purpose  of  giving  such  person  or  persons  the  power  to 
vote  thereon,  upon  stated  terms  and  conditions,  for  a  period 
not  exceeding  five  years.  A  duplicate  of  any  such  voting  trust 
agreement  must  be  filed  in  the  principal  office  of  the  corpora- 
tion and  remain  open  to  inspection  of  stockholders  during 
business  hours,  and  any  other  stockholder  may  execute  a  like 
agreement  and  transfer  his  stock  to  the  same  person  or  per- 
sons and  thereupon  participate  in  all  the  terms,  conditions  and 
privileges  of  the  voting  trust. 

The  stock  participating  in  any  such  voting  trust  agree- 
ment must  be  actually  transferred  to  the  trustees,  the  new 
certificates  issued  to  these  latter  stating  the  fact  that  they  are 
issued  pursuant  to  such  agreement.  The  entries  on  the  books 
of  the  corporation  must  also  note  the  same  fact.  The  trustees 
are  then  empowered  to  vote  the  stock  transferred  to  them  to 
such  extent — and  so  far  only — as  they  are  authorized  thereto 
by  the  terms  of  the  agreement.  (G.  C.  L.,  §  20.)  The  trus- 
tees may  collect  the  dividends  on  the  stock  held  by  them  under 


STOCKHOLDERS.  IOI 

the  trust  agreement,  but  must  account  for  such  dividends  to 
the  equitable  owners. 

The  voting  trust  is  usually  employed  to  insure  a  certain 
management  or  policy  for  a  definite  period.  It  may  be  made 
an  efficient  mode  for  the  protection  of  minority  interests  by 
securing  an  administration  for  a  term  of  years  satisfactory  to 
all  parties  concerned. 


CHAPTER  X. 

STOCKHOLDERS'  MEETINGS. 
(Annual  Meeting.) 


§  99.     General. 

The  corporate  acts  of  stockholders  may  be  performed 
only  in  duly  assembled  stockholders'  meetings.  Some  varia- 
tion of  this  general  rule  is  found  in  the  provisions  of  the  New 
York  statutes  permitting  various  consents  of  stockholders  to 
be  given  by  unanimous  written  consent  without  a  meeting, 
as  for  example,  to  increase  capital  stock,  change  the  location 
of  the  principal  office,  etc.  This  is,  however,  by  express 
statutory  permission  and  does  not  apply  to  corporate  acts  not 
expressly  included. 

§  100.     Place. 

"A  corporation  being  the  mere  creation  of  local  law,  can 
have  no  legal  existence  beyond  the  limits  of  the  sovereignty 
where  created"  (Paul  v.  Va.,  8  Wall.  168  [1868]),  hence 
stockholders  cannot  perform  a  corporate  act,  binding  upon 
those  who  do  not  participate  in  it,  outside  the  jurisdiction 
creating  the  corporation,  except  by  express  statutory  permis- 
sion (Ormsby  v.  Mining  Co.,  56  N.  Y.  623  [1874]),  or  by 
consent  of  all  the  stock.  Stockholders'  meetings  outside  the 
state  are  not  provided  for  by  the  New  York  statutes,  and 
such  meetings  must,  therefore,  be  held  within  the  state 
unless  all  the  stock  consents  to  or  participates  in  the  meeting 
elsewhere.  In  such  case,  the  stockholders,  all  being  partici- 

IO2 


STOCKHOLDERS     MEETINGS. 

pants,  or  agreeing  to  the  place  of  meeting,  are  estopped 
to  deny  the  -validity  of  acts  done  at  the  meeting  so  held. 
Handley  v.  Stutz,  139  U.  S.  417  (1890)  ;  Morawetz  Private 
Corp.,  §  488. 

Within  the  state,  the  place  of  meeting  should  be  designat- 
ed by  the  by-laws.  The  place  for  holding  the  annual  meeting 
must  be  so  designated.  (S.  C.  L.,  §  20.)  Special  elections  of 
directors  must  be  held  at  the  principal  office.  (G.  C.  L.,  §  25.) 
This,  too,  is  the  usual  place  for  meetings  of  stockholders. 
Meetings  cannot  be  held  at  an  unreasonably  inconvenient  time 
or  place. 

§  101.     Notice. 

It  is  to  be  noted  that  there  is  a  distinction,  frequently 
overlooked,  between  the  call  for  a  meeting  and  the  notice 
thereof.  Regular  meetings  being  directed  by  the  by-laws,  re- 
quire no  other  call  or  authorization,  but  usually  require  notice. 
Special  meetings,  however,  require  both  call  and  notice.  They 
must  be  called  in  the  manner  prescribed  by  charter  or  by-laws, 
as,  for  instance,  by  the  president,  by  action  of  the  board,  by 
written  call  of  a  certain  number  of  the  directors,  or  a  certain 
percentage  of  the  stock,  etc.,  etc.  (See  Forms  10,  21,  24.) 
The  notice  then  follows  this  call  and  is  merely  a  formal,  pre- 
scribed announcement  of  the  meeting  authorized  by  the  call. 
(See  Forms  22,  25.) 

Unless  the  statutes  provide  to  the  contrary,  due  notice 
must  be  given  to  every  stockholder  of  all  stockholders'  meet- 
ings. Such  notice  should  give  the  time  and  place  of  meeting, 
and  for  special  meetings,  at  least,  the  business  to  be  transacted 
thereat.  Notice  of  meetings  may  be  waived  by  unanimous 
consent  of  the  stockholders. 

Usually  the  by-laws  prescribe  the  notice  to  be  given  of 
stockholders'  meetings.  In  New  York,  however,  the  statutes 
prescribe  the  notice  for  specified  meetings  and  any  by-law 


IO4  NEW    YORK    CORPORATIONS. 

provisions  must  conform.     The  by-laws  may,  however,  pro 
vide  any  additional  requirements,  not  inconsistent  with  the 
statutes.     (G.  C.  L.,  §  n.)     The  statutory  requirements  are 
as  follows: 

(a)  Waiver  of  Notice.     "  Whenever    *     *     *    a  cor- 
poration is  authorized  to  take  any  action  after  notice  to  its 
members,  or  after  the  lapse  of  a  prescribed  period  of  time, 
such  action  may  be  taken  without  notice  and  without  the 
lapse  of  any  period  of  time,  if  such  action  be  authorized  or 
approved,  and  such  requirements  be  waived  in  writing  by 
every  member  of  such  corporation  or  by  his  attorney  there- 
unto authorized."     (G.  C.  L.,  §  38.)     (See  Form  10.) 

(b)  Notice    of   Annual   Meeting.     Notice    of    annual 
meeting  must  be  given  by : 

(1)  Publication  of  notice  for  at  least  once  a  week  for 
two  successive  weeks  immediately  preceding  such  election  in 
a  newspaper  published  in  the  county  where  such  election  is  to 
be  held. 

(2)  Such  other  notice  as  the  by-laws  prescribe.     (S.  C. 
L.,  §20.) 

No  penalty  is  prescribed  for  failure  to  publish  the  re- 
quired notice  of  the  annual  meeting.  Among  the  larger  cor- 
porations the  requirement  is  generally  observed.  Small  cor- 
porations frequently  omit  publication.  This  may  be  done 
safely  only  where  there  is  complete  unanimity  on  the  part  of 
the  stockholders.  If  publication  is  not  made,  great  care  should 
be  taken  to  see  that  each  stockholder  is  duly  notified  in  accord- 
ance with  the  requirements  of  the  by-laws.  (See  Forms 
17,  18.) 

(c)  Notice  Same  as  for  Annual  Meeting.     Meetings 
for  the  following  purposes  require  the  same  notice  as  annual 
meeting : 

(1)  To  mortgage  corporate  property.     (S.  C.  L.,  §  2.) 

(2)  To  sell  the  entire  property  to  another  corporation. 
(S.  C.  L.,  §33.) 


STOCKHOLDERS'  MEETINGS.  105 

(3)  To  create  preferred  stock.     (S.  C.  L.,  §  47.) 

(4)  To  extend  corporate  existence.     (G.  C.  L.,  §  32.) 

(5)  Special  meetings  to  elect  directors  (S.  C.  L.,  §  20; 
G.  C.  L.,  §  24),  except  when  called  by  stockholders  on  failure 
of  directors  so  to  do.     (See  next  subdivision  (d)  ;  also  §  112.) 

(d)  Stockholders'  Notice  of  Special  Election  of  Direc- 
tors.   If  directors  are  not  elected  at  the  annual  meeting  or  at 
a  special  meeting  called  by  the  directors,  within  one  month 
thereafter  (see  §  112),  any  member  may  call  an  election  on 
notice  as  required  for  the  annual  meeting,  together  with : 

(1)  Personal  service  of  notice  on  each  stockholder  two 
weeks  before  the  meeting,  or, 

(2)  Service  by  mail  directed  to  each  stockholder  at  his 
last  known  post-office  address  two  weeks  before  the  meeting. 

(e)  Notice   of  Meeting  for  Increase   or  Decrease  of 
Capital  Stock.     For  meetings  to  increase  or  decrease  capital 
stock,  notice  must  be  signed  by  the  president  or  vice-president 
and  the  secretary  stating  the  time,  place,  and  object  of  the 
meeting  and  the  amount  of  increase  or  reduction  proposed, 
and  a  copy  of  such  notice  must  be : 

(1)  Published  once  a  week  for  at  least  two  successive 
weeks  in  a  newspaper  in  the  county  where  the  principal  busi- 
ness office  is  located,  if  any  is  published  therein. 

(2)  Be  mailed  to  each  stockholder  at  his  last  known 
post-office  address  at  least  two  weeks  before  the  meeting,  or 
be  personally  served  upon  him  at  least  five  days  before  the 
meeting.     (S.  C.  L.,  §  45.)     (See  §  86;  also  Form  55.) 

(f)  Notice  of  Meeting  to  Change  Number  of  Directors. 
Two  weeks'  written  notice  served  personally  or  by  mail.     (S. 
C.  L.,  §21.) 

(g)  Notice  of  Meeting  to  Alter  or  Extend  Business. 
Same  as  for  increase  of  stock.     (S.  C.  L.,  §§  32,  45.) 

(h)  Notice  of  Meeting  for  Dissolution.  The  follow- 
ing requirements  must  be  observed  for  notification  of  meeting 
for  dissolution: 


106  NEW    YORK    CORPORATIONS. 

(1)  Publication  of  notice  must  be  made  in  one  or  more 
newspapers  published  and  circulating  in  the  county  of  the 
principal  office,  at  least  once  a  week  for  three  successive  weeks 
next  preceding  the  meeting. 

(2)  On  or  before  the  first  day  of  publication,  a  copy 
must  be  served  personally  on  each  stockholder  or  mailed  to 
his  last  known  post-office  address. 

(3)  .    Any  adjournment  of  such  meeting  must  be  pub- 
lished in  papers  in  which  original  call  appeared.     (S.  C.  L., 
§57-)     (See  §56.) 

(i)  Notice  of  Meeting  to  Guarantee  Bonds  of  Another 
Corporation.  Notice  of  such  meeting  must  be  signed  by  a 
majority  of  the  directors  and  served  personally  or  by  mail  on 
each  stockholder  at  least  sixty  days  before  the  meeting.  (S. 
C.  L.,  §40.)  (See  §68.) 

(j)     Notice  of  Meeting  When  Not  Otherwise  Provided. ' 
Where  no  special  provision  is  made  by  statute,   charter  or 
by-laws  as  to  notice  of  a  meeting,  such  meeting  must  be  noti- 
fied in  the  same  manner  as  is  the  annual  meeting.     (G.  C.  L., 
§390 

§  102.     Quorum. 

The  by-laws  should  fix  the  amount  of  stock  which  must 
be  represented  in  order  to  constitute  a  quorum.  (G.  C.  L., 
§  n,  subdiv.  5.)  This  may  be  any  desired  amount  except  at 
the  meetings  for  election  of  directors.  At  such  meeting  the 
statute  expressly  provides  that  "a  plurality  of  the  votes  at 
such  election"  shall  be  sufficient  to  elect.  Under  this  pro- 
vision, any  number  present  at  a  duly  called  meeting  for  elec- 
tion of  directors,  no  matter  whether  they  constitute  a  majority 
of  the  stock  or  a  by-law  quorum,  or  not,  may  act,  and  a 
plurality  of  those  voting  elect.  (S.  C.  L.,  §20;  G.  C.  L., 
§§  24,  25.)  Matter  of  Rapid  Transit  Ferry  Co.,  15  App. 
Div.  530  (1897). 


STOCKHOLDERS'  MEETINGS.  107 

At  general  meetings,  unless  the  charter  or  by-laws  provide 
for  a  quorum,  the  common  law  rule  prevails  and  the  share- 
holders who  actually  assemble  at  any  properly  convened  meet- 
ing without  regard  to  their  number  constitute  a  quorum  for 
the  transaction  of  business,  and  a  majority  of  such  quorum 
can  act.  Morawetz  Private  Corp.,  §  476;  Field  v.  Field,  9 
Wend.  395  (1832). 

§  103.     Right  to  Vote. 

Unless  otherwise  provided  in  the  charter,  every  stock- 
holder is  entitled  to  one  vote  at  stockholders'  meetings  for 
every  share  of  stock  standing  in  his  name  on  the  books  of  the 
corporation.  Only  stockholders  of  record  may  vote  at  stock- 
holders' meetings  unless  otherwise  provided  in  the  charter. 
(G.  C.  L.,  §  20;  S.  C.  L.,  §  29.)  (See  §  9ia.) 

The  stockholders,  by  by-laws  adopted  at  any  annual  meet- 
ing or  at  a  special  meeting,  duly  called  for  the  purpose,  may 
prescribe  a  period  of  not  over  forty  days,  prior  to  stock- 
holders' meetings,  during  which  no  transfer  of  stock  may  be 
made  on  the  corporate  books.  (G.  C.  L.,  §  20.)  The  result 
of  this  provision  is  that,  while  transfers  may  still  be  made 
between  the  date  of  the  closing  of  the  books  and  the  holding 
of  the  meeting,  such  transfers  are  not  entered  on  the  corpor- 
ate records  until  after  the  election,  and  do  not  carry  with 
them  the  right  to  vote  at  the  approaching  meeting  nor  divest 
the  stockholder  of  record  of  his  right  to  appear  and  vote 
thereat.  (See  §  105.)  Where  stock  is  pledged  as  collateral 
security  the  pledgee  must  issue  a  proxy  to  the  pledgor  (G.  C. 
L.,  §  20),  for  the  latter  remains  the  real  stockholder  with  full 
liabilities.  (S.  C.  L.,  §  54.) 

"A  stockholder  has  a  legal  right  to  vote  upon  a  measure 
at  a  meeting  of  stockholders,  even  though  he  has  a  personal 
interest  therein  separate  from  other  stockholders.  In  such 
a  meeting  each  shareholder  represents  himself  and  his  in- 


IO8  NEW    YORK    CORPORATIONS. 

terests  solely  and  he,  in  no  sense,  acts  as  trustee  or  representa- 
tive of  others."  Gamble  v.  Water  Co.,  123  N.  Y.  91,  97 
(1896).  A  corporation  which  holds  stock  may  legally  vote 
upon  it  through  its  duly  authorized  representatives.  Oelber- 
mann  v.  Railway,  77  Hun  332  (1894). 

Since  the  right  to  vote  depends  upon  the  corporate  re- 
cords, it  is  important  that  they  be  easily  accessible  at  the  time 
of  the  election.  Any  stockholder  may  demand  their  produc- 
tion at  any  meeting.  (G.  C.  L.,  §  20.)  It  is  a  common 
practice  where  the  number  of  shareholders  is  large  to  pre- 
pare an  alphabetical  list  for  ready  reference  showing  the  num- 
ber of  shares  owned  by  each.  In  the  event  of  challenge  the 
corporate  records  are  conclusive  of  the  right  to  vote  so  far 
as  the  corporation  is  concerned.  (See  §  109.) 

It  is  possible  to  issue  non-voting  stock  under  the  power 
which  is  given  to  create  preferences.  (B.  C.  L.,  §  2.)  The 
right  is  frequently  employed  to  advantage,  as  in  the  incorpora- 
tion of  a  partnership  when  it  is  desired  to  give  the  partners 
equal  rights  of  management,  though  possessed  of  different 
interests  in  the  capital. 

§  104.     Proxies. 

Any  member  of  a  corporation,  other  than  a  religious 
corporation,  may  vote  on  all  or  any  number  of  shares  of  his 
stock  by  proxy.  (G.  C.  L.,  §§  20,  21.)  As  the  right  is  not  a 
common  law  right,  but  depends  entirely  upon  statute  (People 
v  Twaddell,  18  Hun  427,  430  [1879]),  the  terms  of  the  law 
must  be  complied  with  strictly.  In  re  Barker,  6  Wend.  509 
(1831).  The  proxy  must  be  in  writing  and  be  executed  by 
the  stockholder  or  his  duly  authorized  attorney.  (See  Forms 
9,  26,  27,  28.)  It  expires  at  the  end  of  eleven  months  unless 
otherwise  expressly  provided  in  the  instrument.  The  usual 
proxy  is  revocable  at  will  (see  Form  28),  and  even  a  proxy 
coupled  with  an  interest  and,  in  terms,  irrevocable,  has  been 
held  invalid  under  the  statutory  provisions  forbidding  issu- 


STOCKHOLDERS     MEETINGS. 

ance  of  a  proxy  for  money  or  anything  of  value.  (G.  C.  L., 
§  20.)  Matter  of  Germicide  Co.,  65  Hun  606  (1892).  The 
sale  of  proxies  is  a  misdemeanor.  (Pen.  Code,  §  613.)  A 
person  need  not  be  a  stockholder  to  act  as  proxy.  (G.  C.  L., 
§  3.)  In  re  Lighthall  Mfg.  Co.,  47  Hun  258  (1888).  The 
right  to  substitute  another  in  his  stead  may  be  given  to  the 
holder  of  a  proxy  by  express  provision  in  the  instrument. 

Election  inspectors  have  no  power  to  determine  the  genu- 
ineness of  proxies.  Their  duties  are  entirely  ministerial  and 
if  the  proxies  are  regular  upon  their  face  they  must  receive 
them.  In  re  Cecil,  36  How.  Prac.  477  (1869).  (See  §  109.) 

Any  inspector  of  election  or  other  officer  presiding  at  an 
election  of  directors,  or  any  member  present,  may  require 
the  person  presenting  a  proxy  to  take  and  subscribe  the  fol- 
lowing oath:  "I  do  solemnly  swear  that  I  have  not,  either 
directly,  indirectly  or  impliedly,  given  any  promise  or  any  sum 
of  money  or  anything  of  value  to  induce  the  giving  of  a 
proxy  to  me  to  vote  at  this  election,  or  received  any  promise 
or  any  sum  of  money  or  anything  of  value  to  influence  the 
giving  of  my  vote  at  this  meeting  or  as  a  consideration  there- 
for." All  proxies,  together  with  any  oaths  taken  as  above, 
must  be  filed  in  the  records  of  the  corporation.  (G.  C.  L., 
§  22.) 

The  use  of  proxies  has  become  so  common  that  in  the 
larger  corporations  a  blank  form — on  occasion,  with  the  name 
of  the  party  to  act  printed  in — is  usually  sent  to  each  stock- 
holder with  the  notice  of  the  annual  meeting.  (See  Forms 
26,  27.) 

§  105.     Closing  Stock  Books. 

The  stockholders  may  provide  in  the  by-laws  that  the 
stock  book  shall  be  closed  and  no  transfers  registered  for  a 
period  not  exceeding  forty  days  prior  to  stockholders'  meet- 


IIO  NEW    YORK    CORPORATIONS. 

ings.  (G.  C.  L.,  §  20.)  Under  this  provision  the  books  are 
usually  closed  from  ten  to  forty  days  before  the  annual  meet- 
ing. No  formality  is  required  in  closing  the  books  and  no 
entry  of  closing  is  made  therein.  After  the  date  fixed  upon, 
the  transfer  agent  simply  refuses  to  register  further  transfers. 
The  stockholders  of  record  then  vote  at  the  meeting  regard- 
less of  any  transfers  that  may  have  taken  place  after  the 
closing  of  the  books.  The  object  of  closing  the  books  is  to 
avoid  the  complications  that  might  otherwise  arise,  and  also 
to  give  the  secretary  time  to  prepare  a  correct  list  of  share- 
holders for  use  at  the  meeting.  (See  §§  103,  136.) 

§  106.     Election  of  Directors. 

The  directors  are  elected  at  the  annual  meeting  or  at  a 
special  meeting  called  for  the  purpose.  Such  meetings  are 
peculiar  in  that  the  number  of  stockholders  present — without 
regard  to  the  amount  of  stock  represented,  or  any  by-law 
regulations — constitute  a  quorum  for  the  election  of  directors 
and  a  plurality  of  them  may  act.  (S.  C.  L.,  §  20.)  (See 
§  102.)  Notice  of  meetings  for  election  of  directors  is  pre- 
scribed by  statute.  (See  §  zoib,  c.)  Voting  at  the  election 
of  directors  is  usually  by  ballot. 

§  107.     Cumulative  Voting. 

The  certificate  of  incorporation  may  provide  that  each 
stockholder  shall  be  entitled  to  as  many  votes  as  he  has  shares 
of  stock,  multiplied  by  the  number  of  directors  to  be  elected, 
and  that  he  may  cast  all  of  such  votes  for  a  single  director  or 
distribute  them  among  two  or  more  as  he  sees  fit.  (G.  C.  L., 
§  20.)  .This  system  of  voting,  known  as  cumulative  vot- 
ing, is  a  most  effective  method  of  protecting  minority  inter- 
ests, enabling  such  interests  to  secure  representation  on  the 
board  of  directors.  For  instance,  if  one  hundred  shares  of 
stock  participate  in  an  election  of  a  board  of  directors  con- 
sisting of  five  members,  a  stockholder  owning  twenty  shares 


STOCKHOLDERS     MEETINGS.  Ill 

would,  in  the  face  of  opposition,  have  no  possible  chance  of 
electing  a  director  to  represent  his  interests,  under  the  ordi- 
nary system.  He  would  cast  twenty  votes  for  each  member, 
which,  as  against  the  eighty  votes  opposed,  would  be  entirely 
ineffective.  If,  however,  the  cumulative  method  prevails,  in- 
stead of  dividing  his  votes  among  the  five  candidates,  he  could 
cast  his  cumulated  votes — which  in  this  case  would  number  one 
hundred — for  his  own  candidate,  and  by  no  possible  combi- 
nation among  the  owners  of  the  other  eighty  shares  could  this 
candidate  be  defeated. 

§  108.     Inspectors  of  Election. 

The  election  of  directors  must  be  conducted  by  two  or 
more  inspectors  (in  re  Lighthall  Mfg.  Co.,  47  Hun  258 
[1888]),  who  need  not  necessarily  be  stockholders.  For  the 
election  of  directors  at  the  first  annual  meeting  and  for  any 
preceding  stockholders'  elections  to  fill  vacancies  among  the 
directors,  the  inspectors  are  appointed  by  the  board  of  di- 
rectors named  in  the  charter.  Inspectors  at  subsequent  elec- 
tions are  appointed  as  prescribed  in  the  by-laws.  If  any  in- 
spector refuses  to  serve,  or  neglects  to  attend  the  election,  or 
if  his  office  becomes  vacant,  the  meeting  may  appoint  a  sub- 
stitute, unless  the  by-laws  otherwise  provide.  Inspectors  may 
themselves  be  candidates  for  office.  Officers  and  directors, 
except  of  monied  corporations,  are  eligible  to  appointment  as 
inspectors.  (S.  C.  L.,  §  28.) 

Inspectors  must,  before  entering  on  the  discharge  of  their 
duties,  take  and  subscribe  an  oath  to  faithfully  perform  their 
duties  with  strict  impartiality  and  according  to  the  best  of 
their  ability.  Violation  of  this  oath  is  punishable  as  a  mis- 
demeanor. (Pen.  Code,  §  613.)  The  oath  must  be  filed  with 
a  certificate  of  the  result  of  the  election,  in  the  office  of  the 
clerk  of  the  county  where  the  election  was  held.  (S.  C.  L., 
§  28.)  (See  Forms  19,  20.)  Filing  fee,  6  cents. 


112  NEW    YORK    CORPORATIONS. 

It  has  been  held  that  the  provision  as  to  filing  the  oath 
is  directory  only  and  that  failure  to  comply  will  not  invalidate 
the  election.  Bank  v.  Scott,  53  App.  Div.  65,  72  (1900). 
Nor  will  an  election  be  set  aside  on  the  ground  that  the 
inspectors  were  not  sworn  in  the  form  prescribed  by  statute. 
Matter  of  the  Election  of  Directors  of  the  Chenango  Ins.  Co., 
19  Wend.  635  (1839).  The  best  practice,  however,  conforms 
strictly  to  the  requirements  of  the  statutes,  both  as  to  the 
form  of  oath  and  the  filing  of  oath  and  report. 

In  the  discharge  of  their  duties,  inspectors  act  in  a  purely 
ministerial  capacity.  Their  business  is  to  see  that  the  election 
is  conducted  in  a  regular  manner  by  persons  with  an  apparent 
right  to  vote.  Matter  of  Cecil,  36  How.  Pr.  477  (1869). 

In  practice,  unless  there  is  some  question  as  to  the  rights 
of  those  desiring  to  vote  at  the  election,  the  duties  of  the  in- 
spectors are  very  simple.  They  are  first  sworn  in  due  form 
(see  Form  19)  and  then  take  entire  charge  of  the  proceedings, 
superintending  the  preparation  and  collection  of  ballots,  count- 
ing the  votes  when  cast  and  announcing  the  results  of  the 
election.  They  then  prepare,  subscribe  and  certify  to  their 
report  (see  Form  20),  and  their  duties  are  complete. 

In  the  absence  of  objection  the  inspectors  must  receive 
any  vote  offered  unless  obviously  improper  or  fraudulent.  If, 
however,  any  vote  is  challenged,  they  must  require  that  the 
"books  and  papers  containing  the  record  of  membership  of 
the  corporation"  be  produced  "and  all  persons  who  may  ap- 
pear from  such  books  to  be  members  of  the  corporation  may 
vote  at  such  meeting."  (G.  C.  L.,  §  20.)  (See  next  section.) 

§  109.     Challenges. 

If  illegal  votes  are  offered  at  a  corporate  election,  objec- 
tion must  be  raised  at  the  time  or  the  right  to  question  their 
validity  is  lost.  In  re  Election  of  Directors  of  Chenango  Co. 
Ins.  Co.,  19  Wend.  635,  637  (1839);  Vandenburgh  v.  Ry. 
Co.,  29  Hun.  348  (1883). 


STOCKHOLDERS     MEETINGS.  113 

If  the  right  to  vote  is  challenged,  the  inspectors  must 
demand  the  corporate  books,  and,  if  they  can  be  had,  determine 
therefrom  the  rights  of  the  member.  They  are  not  allowed  to 
go  behind  the  records  to  decide  his  rights.  (G.  C.  L.,  §  20.) 
Ex  parte  L.  I.  Ry.,  19  Wend.  37  (1839)  ;  Matter  of  Mutual 
Fire  Ins.  Co.,  51  App.  Div.  163  (1900).  (For  powers  of 
court  in  similar  cases,  see  Strong  v.  Smith,  15  Hun  222 
[1878],  Affd.  80  N.  Y.  637  [1880].) 

The  sale  of  votes  is  illegal  and  a  misdemeanor.  (Pen. 
Code,  §  613.)  Any  stockholder  suspected  of  having  promised 
his  vote  for  a  consideration  may  be  challenged  by  an  election 
inspector,  by  the  presiding  officer  or  by  any  member  present 
and  compelled  to  take  and  subscribe  the  following  oath,  ad- 
ministered by  the  election  inspector  or  by  the  presiding  officer : 
"I  do  solemnly  swear  that  in  voting  at  this  election  I  have  not, 
either  directly,  indirectly  or  impliedly,  received  any  promise  or 
any  sum  of  money  or  anything  of  value  to  influence  the  giving 
of  my  vote  or  votes  at  this  meeting  or  as  a  consideration 
therefor."  (G.  C.  L.,  §  22.)  (For  oath  of  proxy,  see  §  104.) 

§  no.     Contested  Elections. 

Proceedings  to  contest  an  election  may  be  by  quo  war- 
rant o  (Code  Civil  Pro.,  §  1948  et  seq.},  or  by  summary  action 
of  the  Supreme  Court  on  application  thereto.  (G.  C.  L., 
§  27.)  These  two  methods  exclude  all  others.  Ry.  Co.  v. 
Kay,  14  Abb.  Pr.  (N.  S.)  191  (1873). 

If  the  election  has  been  conducted  in  good  faith  and  the 
wishes  of  the  stockholders  fairly  expressed,  no  mere  infor- 
mality will  vitiate  it.  Philips  v.  Wickham,  i  Paige  590,  600 
(1829);  Matter  of  Election  of  Directors  of  the  Chenango 
Co.  Ins.  Co.,  supra. 

If  a  candidate  receives  a  majority  of  the  legal  votes,  the 
fact  that  illegal  votes  were  cast  will  not  defeat  the  election. 
In  re  Argus  Co.,  138  N.  Y.  557  (1893).  Where,  however, 


114  NEW    YORK    CORPORATIONS. 

votes  have  been  erroneously  received  or  rejected,  which  would 
have  changed  the  result  of  the  election,  the  court  must  de- 
clare the  election  void  and  a  new  one  must  be  held.  People 
ex  rel  Putzel  v.  Simonson,  61  Hun  338  (1891).  Only  per- 
sons whose  rights  have  been  violated  may  complain  of  the 
illegality  of  the  election.  Matter  of  Syracuse  C.  &  N.  Y.  Ry., 
91  N.  Y.  i  (1883). 

§m.     Effect  of  Failure  to  Elect  Directors. 

"  If  the  directors  shall  not  be  elected  on  the  day  desig- 
nated in  the  by-laws  or  by  law,  the  corporation  shall  not  for 
that  reason  be  dissolved;  but  every  director  shall  continue  to 
hold  his  office  and  discharge  his  duties  until  his  successor  has 
been  elected."  (G.  C.  L.,  §  23.)  Many  of  the  smaller  New 
York  corporations  take  advantage  of  this  provision,  and,  by 
allowing  the  old  board  to  hold  over  and  to  fill  vacancies  by 
vote  of  its  own  members,  escape  the  statutory  requirements 
as  to  inspectors  and  publication  of  notice.  As  long  as  there 
is  no  formal  protest  by  a  stockholder,  there  is  no  objection 
to  this  practice.  In  one  case  an  omission  to  elect  directors 
for  eight  years  was  upheld.  Geneva  Mineral  Springs  Co.  v. 
Coursey,  45  App.  Div.  268,  275  (1899)  ;  Phila.  &  R.  Co.  Co. 
v.  Hotchkiss,  82  N.  Y.  471,  474  (1880)  ;  Beardsley  v.  John- 
son, 121  N.  Y.  224  (1890).  The  powers  of  directors  who 
hold  over  on  account  of  a  failure  to  elect  their  successors,  are 
the  same  in  every  respect  as  if  their  term  of  office  had  not 
expired.  As  to  the  powers  of  a  stockholder  in  such  a  case, 
see  People  ex  rel  Walker  v.  Albany  Hospital,  n  Abb.  Pr. 
(N.  S.)  4  (1871). 

§  112.     Special  Elections. 

The  statutes  provide  that  the  directors  shall  forthwith 
call  a  special  meeting  for  the  election  of  directors  when  for 
any  reason  they  have  not  been -chosen  on  the  day  fixed  for 


STOCKHOLDERS     MEETINGS.  115 

the  regular  election.  Notice  for  this  meeting  is  the  same  as 
for  the  annual  meeting.  (G.  C.  L.,  §  24.) 

If  the  directors  do  not  call  such  meeting  within  one 
month  of  the  date  on  which  the  annual  meeting  should  have 
been  held,  or  if  such  meeting  results  in  a  failure  to  elect,  any 
stockholder  may  call  a  meeting  for  the  purpose  of  electing 
directors.  (For  notice,  see  §  loid.) 

"  Such  meeting  shall  be  held  at  the  office  of  the  corpora- 
tion or,  if  it  has  none,  at  the  place  in  this  state  where  its 
principal  business  has  been  transacted,  or  if  access  to  such 
office  or  place  is  denied  or  cannot  he  had,  at  some  other  place 
in  the  city,  village  or  town  where  such  office  or  place  is  or  was 
located."  (G.  C.  L.,  §25.) 

At  such  meeting  the  members  attending  shall  constitute 
a  quorum  and  any  business  which  might  have  been  passed 
upon  at  the  annual  meeting  may  be  transacted.  (Id.) 

If  the  corporate  records  are  not  accessible,  each  member 
offering  to  vote  must  be  sworn  to  the  effect  that  he  is  bona 
fide  a  member  and  to  the  number  of  shares  standing  in  his 
name.  All  such  affidavits  must  be  attached  to  the  return  of 
the  inspectors  for  filing  with  the  county  clerk.  (G.  C.  L., 
§26.) 

Special  meetings  of  the  stockholders  to  fill  vacancies  on 
the  board,  when  such  vacancies  are  to  be  filled  by  the  stock- 
holders, may  be  called  at  any  time  as  is  any  other  special 
meeting,  except  that  notice  thereof  must  be  the  same  as  for 
the  annual  meeting.  (S.  C.  L.,  §  20.)  (See  §  loib.) 


CHAPTER  XI. 
DIRECTORS. 


§  113.     Number. 

The  number  of  directors  must  not  be  less  than  three.  No 
maximum  limit  is  prescribed.  The  number  of  directors  and 
the  names  of  those  who  are  to  serve  for  the  first  year  are  set 
forth  in  and  fixed  by  the  charter.  (B.  C.  L.,  §  2.)  The  num- 
ber may  be  changed  by  charter  amendment.  (See  §§  72, 
loif.)  If  the  number  is  increased,  the  board  itself  elects  the 
additional  members  to  hold  for  the  balance  of  the  year  and 
until  their  successors  are  elected,  and  if  the  board  is  classified 
(see  §  115),  with  terms  expiring  at  different  times,  the  new 
directors  must  be  apportioned  among  these  classes  so  as  to 
preserve  as  nearly  as  possible  the  same  relative  proportions. 
(S.  C.  L.,  §21.) 

§  114.     Election. 

Directors  are  elected  at  the  annual  meeting,  or  in  event 
of  failure  of  that  meeting,  at  a  special  meeting  called  for  the 
purpose.  They  hold  office  until  their  successors  are  elected. 
(See  §§  106-112.) 

§  115.     Classification. 

"At  least  one-fourth  in  number  of  the  directors  of  every 
stock  corporation  shall  be  elected  annually."  (S.  C.  L.,  §  20.) 

Under  this  provision,  the  board  of  directors  may  be  di- 
vided into  two,  three  or  even  four  classes,  if  the  number  of 
directors  is  such  as  to  permit ;  each  consisting  of  not  less  than 

116 


DIRECTORS.  117 

one-fourth  the  whole  number  of  directors  and  one  of  these 
classes  to  be  elected  each  year.  Such  classification  is  common 
in  practice,  and  is  designed  to  prevent  the  sudden  changes  of 
policy  that  might  result  if  the  entire  board  were  elected  each 
year. 

§  116.     Vacancies. 

Vacancies  occurring  in  the  board  are  to  be  filled  as  pre- 
scribed in  the  by-laws.  (S.  C.  L.,  §  20.)  Usually  the  board 
is  empowered  to  fill  such  vacancies,  but  unless  the  by-laws  so 
prescribe,  or  the  power  is  given  the  board  by  charter  provi- 
sion, the  directors  cannot  act  in  the  matter  and  vacancies  must 
be  filled  by  the  stockholders. 

This  may  be  done  at  a  special  stockholders'  meeting  for 
election  of  directors  (see  §  112),  or  if  the  directors  remaining 
are  sufficient  to  constitute  a  quorum  and  to  comply  with  the 
statutory  requirement  that  the  number  of  directors  must  not 
be  less  than  three,  the  vacancies  may  be  left  unfilled  until  the 
next  annual  meeting. 

Vacancies  created  through  an  increase  in  the  number  of 
directors  must  be  filled  by  vote  of  the  majority  of  the  directors 
in  office  at  the  time  of  the  increase.  (See  §  113.) 

§  117.     Qualifications  of  Directors. 

Every  director  must  be  a  stockholder  unless  otherwise 
provided  in  the  charter  or  by-laws.  (S.  C.  L.,  §  20.)  At 
least  one  of  them  must  be  a  resident  of  the  state.  (G.  C.  L., 
§  29.)  People  ex  rel  Gales  v.  McDonough,  28  Misc.  652 
(1899). 

If  possessed  of  these  statutory  qualifications,  any  one 
capable  of  acting  as  an  agent  of  the  company  may  serve  as  a 
director.  Married  women  and  aliens  may  act,  and,  generally, 
any  one  who  may  act  as  an  agent.  - . 


Il8  NEW    YORK    CORPORATIONS. 

§  118.     Compensation  of  Directors. 

In  the  absence  of  express  agreement,  the  directors  are 
not  entitled  to  compensation  for  their  services  as  such.  This 
is  an  application  of  the  general  rule  of  trusts.  Mather  v.  E. 
M.  Co.,  118  N.  Y.  629,  632  (1890).  Even  where  a  director 
performs  services  outside  those  ordinarily  performed,  the 
tendency  of  the  courts  is  to  hold  that,  in  the  absence  of  express 
agreement,  they  must  be  treated  as  undertaken  through  zeal 
for  the  company's  welfare  rather  than  through  expectation  of 
reward.  Stout  v.  Security  Co.,  82  App.  Div.  129  (1903). 
Vid.  also  Bagley  v.  Ry.,  165  N.  Y.  179  (1900). 

Directors  are  not  debarred  from  becoming  employees  of 
the  company,  and,  as  such,  they  are  entitled  to  reasonable  com- 
pensation. But  as  in  fixing  it,  they  are  in  the  position  of 
trustees  dealing  with  themselves  in  respect  to  their  trusts, 
their  action  is  subject  to  question  by  the  stockholders  and  re- 
view by  the  court.  Fitchett  v.  Murphy,  46  App.  Div.  181, 
185  (1899).  Where  directors  for  the  first  year  hold  over 
because  of  their  neglect  or  refusal  to  adopt  the  by-laws  re- 
quired to  enable  the  stockholders  to  hold  the  annual  election 
for  directors,  all  their  acts  while  so  holding  over,  done  for  or 
in  the  name  of  the  corporation  designed  to  charge  upon  it  any 
liability  or  obligation  for  the  services  of  any  such  director, 
or  any  officer  or  attorney  or  counsel  appointed  by  them,  is  held 
fraudulent  and  void.  (S.  C.  L.,  §  22.) 

§  119.     Powers  of  Directors. 

The  general  management  of  the  corporate  business  is  in 
the  hands  of  the  directors.  (G.  C.  L.,  §  29.)  Speaking  gene- 
rally, the  shareholders  cannot  act  for  the  corporation,  either 
individually  or  collectively,  and  have  no  power,  unless  given 
by  statute,  to  interfere  with  the  directors  in  the  conduct  of 
corporate  business.  Conro  v.  Iron  Co.,  12  Barb.  27,  63 
(1851).  The  powers  of  the  directors  may,  however,  be  limit- 


DIRECTORS.  119 

ed  in  any  particular  which  does  not  exempt  them  from  any 
legal  obligation  or  duty,  by  suitable  provision  in  the  articles 
of  incorporation  (B.  C.  L.,  §  2)  or  later  by  by-law  provisions. 
(G.  C.  L.,  §  n.)  Within  such  limits,  and  in  the  management 
of  the  ordinary  and  regular  business  of  the  corporation,  the 
board  of  directors  is  supreme.  Hoyt  v.  Thompson,  19  N.  Y. 
207,  216  (1859).  They  are  not  amenable  to  motions  or  reso- 
lutions of  the  stockholders,  or  to  removal,  unless  so  provided 
in  the  certificate  of  incorporation. 

The  powers  of  the  directors,  though  broad,  do  not  ex- 
tend to  matters  involving  a  fundamental  change  in  business 
or  in  the  constitution  of  the  company,  even  though  within  the 
charter  powers,  unless  such  power  is  expressly  given  by  stat- 
ute, charter  or  by-laws.  Ry.  Co.  v.  Allerton,  85  U.  S.  233 

(1873). 

The  directors  may  act  only  as  a  board  and  when  regu- 
larly assembled  at  a  board  meeting.  Neither  individually  nor 
collectively  are  they  agents  of  the  corporation,  unless  duly 
assembled  as  its  executive  board.  Where,  however,  they  are 
required  by  statute  to  sign  a  notice  of  meeting,  a  certificate 
changing  the  number  of  trustees  (L.  1878,  Ch.  316),  or  to  do 
any  other  purely  ministerial  act,  no  meeting  is  necessary.  In 
such  matters  compliance  with  the  letter  of  the  statute,  which 
only  requires  the  individual  signatures  or  certification  of  di- 
rectors, is  sufficient.  Burden  v.  Burden,  159  N.  Y.  287,  302 
(1899).  (G.  C.  L.,  §  39.) 

The  directors  may  make  necessary  by-laws  not  incon- 
sistent with  those  adopted  by  the  stockholders.  (G.  C.  L., 
§  29.)  (See  Chap.  IV,  "By-Laws";  also  generally  §  88  and 
Chap.  XII,  "Officers.") 

§  120.     Powers  of  Directors  in  Case  of  Dissolution. 

Upon  dissolution,  the  directors  become  trustees  of  the 
creditors  and  stockholders  with  full  power  to  settle  the  cor- 


I2O  NEW    YORK    CORPORATIONS. 

porate  affairs;  collect  and  pay  outstanding  debts  and  divide 
any  surplus  among  those  entitled  thereto.  They  have  power 
to  sue  for  the  debts  and  property  of  the  corporation  as  such 
trustees  and  are  jointly  and  severally  liable  for  the  corporate 
assets  which  come  into  their  hands.  (G.  C.  L.,  §  30.) 

§  121.     Relations  of  Directors  to  Corporation  and  Stock- 
holders. 

"  There  seems  to  be  a  mistaken  notion  in  some  minds 
that  the  relation  which  exists  between  directors  of  a  corpora- 
tion, and  the  corporation  is  that  of  principal  and  agent.  This 
is  not  true.  Such  relation  is,  and  always  was,  as  to  the  prop- 
erty of  the  corporation,  fiduciary  in  character,  and  while  not 
strictly  that  of  trustee  and  cestui  que  trust,  yet  it  partakes  of 
such  nature.  The  agency  of  the  directors  rests  solely  in  their 
dealings  with  third  persons,  when  they  represent  the  corpora- 
tion as  its  agents;  but  in  dealings  with  the  corporation  they 
act  in  a  fiduciary  capacity  for  the  shareholders,  as  it  is  to  their 
care  that  the  shareholders,  acting  through  the  corporate  entity, 
intrust  the  control  of  its  property  and  the  management  of  its 
business."  Mabon  v.  Miller,  81  App.  Div.  10,  17  (1903), 
per  Hatch,  J.  The  result  of  this  doctrine  is  "that  the  utmost 
good  faith"  is  required  in  dealings  between  the  directors  and 
the  company. 

The  New  York  courts  enforce  this  rule  with  a  vigor  not 
in  accord  with  the  weight  of  authority  in  the  United  States 
at  large.  While  the  majority  of  courts  hold  that  the  corpora- 
tion is  bound  by  a  contract  with  a  director  if  entered  into  in 
good  faith,  the  settled  doctrine  in  this  state  is  that  the  court 
"will  not  stop  to  inquire  whether  the  contract  or  transaction 
was  fair  or  unfair.  It  prevents  frauds  by  making  them  as  far 
as  may  be  impossible  *  *  *  it  weakens  the  temptation 
to  dishonesty  or  unfair  dealing  on  the  part  of  the  trustees  by 
vitiating,  without  attempt  at  discrimination,  all  transactions 
in  which  they  assume  the  dual  character  of  principal  and  rep- 


DIRECTORS.  121 

resentative."  Munson  v.  Ry.,  103  N.  Y.  58,  74  (1886). 
See  also  Carpenter  v.  Taylor,  164  N.  Y.  171,  178  (1900). 
It  makes  no  difference  that  only  one  director  is  party  to  the 
contract  and  that  all  the  other  directors,  some  of  whom  were 
personally  interested,  voted  for  it. 

Contracts  of  this  nature  are,  however,  binding  on  the 
director  at  the  option  of  the  corporation.  Veeder  v.  Horst- 
mann,  85  App.  Div.  154,  159  (1903).  It  follows,  therefore, 
that  contracts  between  the  corporation  and  a  director  are 
voidable  and  not  void.  Barr  v.  Ry.,  125  N.  Y.  263,  275 
(1891).  They  may  be  annulled  if  desired  by  the  corporation, 
but  if  nothing  is  done  in  avoidance,  the  transaction  remains. 

Any  action  looking  toward  avoidance  of  such  a  contract 
must  be  taken  promptly  after  knowledge  of  the  conditions. 
"If  knowledge  and  opportunity  concur,  *  *  *  delay,  if 
unreasonable,  or  attended  by  retention  and  enjoyment  of  the 
results  of  the  transaction  may  be  deemed  equivalent  to  an 
adoption  and  ratification  of  that  which  before  was  the  subject 
for  action  in  repudiation  of  any  obligation.  The  rule  is  not 
designed  to  work  injustice,  but  to  protect  those  who  repose 
confidence  in  others  holding  toward  them  fiduciary  positions 
and  to  whose  care  have  been  confided  the  management  and 
custody  of  property  and  interests."  Id.,  per  Gray,  J.  When 
the  contract  is  avoided  by  the  corporation,  this  latter  is  liable 
for  any  benefits  received.  Thomas  v.  Ry.,  109  U.  S.  522 
(1883). 

§  122.     Directors'  Liability  for  Negligence. 

The  directors  are  bound  to  exercise  care  and  prudence 
in  the  execution  of  their  trust  to  the  same  degree  as  ordinarily 
exercised  by  men  of  common  prudence  in  their  own  affairs. 
Hanna  v.  Peoples  Bank,  35  Misc.  517,  521  (I9OI).1  They 
are  therefore  personally  liable  for  and  must  make  good  every 

iVid.  for  a  full  discussion  of  this  rule,  Hun  v.  Gary,  82  N.  T.  65,  71 
(1880). 


122  NEW    YORK    CORPORATIONS. 

loss  arising  from  their  failure  to  exercise  such  care  or  from 
breaches  of  the  by-laws.1  The  proper  party  to  enforce  this 
liability  is  the  corporation,  but  where,  for  any  reason,  it  will 
riot  or  cannot  sue,  individual  stockholders  may  bring  suit. 
Brinckerhoff  v.  Bostwick,  88  N.  Y.  52,  59  (1882). 

It  is  well  settled,  however,  that  directors  are  not  liable 
for  losses  due  to  mere  mistakes  in  judgment  (Id.),  nor  for 
theft  or  accidents  not  due  to  negligence  on  their  part.  Briggs 
v.  Spaulding,  141  U.  S.  132  (1891). 

§  123.     Statutory  Liability  of  Directors. 

The  statutory  liability  of  directors  to  the  corporation 
and  stockholders  is  as  follows: 

(a)  For  making  dividends  except  from  surplus  profits, 
or  for  withdrawing  or  in  any  way  paying  to  the  stockholders, 
or  any  of  them  any  part  of  the  capital,  or  for  reducing  the 
capital  stock  in  any  unauthorized  way,  the  directors  in  whose 
administration  it  happened  are  jointly  and  severally  liable  to 
the  corporation  and  its  creditors  to  the  full  amount  of  any 
loss  sustained   (S.  C.  L.,  §  23),  and  are  guilty  of  a  misde- 
meanor.    (Pen.  Code,  §  594.)     (See  §  88.) 

(b)  Directors   and   officers   making  transfers   of   cor- 
porate property  to  officers,  directors  or  stockholders  to  avoid 
payment  of  debts  or  in  anticipation  of  insolvency  with  intent 
to  prefer  or  defraud  creditors,  are  personally  liable  to  stock- 
holders and  creditors  of  the  corporation  for  any  loss  occasion- 
ed thereby.     (S.  C.  L.,  §48.) 

(c)  Directors  or  officers  signing  any  certificate  or  re- 
port made  or  public  notice  given,  which  is  false  in  any  mate- 
rial respect,  are  jointly  and  severally  liable  to  any  person  who 
has  either  directly  or  indirectly  become  a  stockholder  or  cred- 
itor upon  the  faith  of  such  representation.     The  amount  of 
damage  sustained  is  the  measure  of  liability.    Actions  limited 

*For  the  extent  of  their  liability,  Via.  Bloom  v.  Loan  Co.,   152  N.  T. 
114,  121   (1897). 


DIRECTORS.  123 

to  two  years  from  date  of  the  representation.  (S.  C.  L., 
§  31.)  It  is  not  necessary  to  show  that  the  directors  signing 
knew  that  the  report  contained  false  statements.  Huntington 
v.  Attrill,  118  N.  Y.  365  (1890).  If  made  with  knowledge, 
such  act  is  a  misdemeanor.  (Pen.  Code,  §  611.) 

A  director  is  deemed  to  have  knowledge  of  the  corporate 
affairs  sufficient  to  enable  him  to  determine  whether  any  act, 
proceeding  or  omission  of  the  board  to  which  he  belongs,  is 
in  violation  of  the  provisions  of  the  Penal  Code  relating  to 
directors,  and,  if  in  violation  thereof,  he  must,  if  present,  to 
escape  liability  therefor,  cause  or  make  written  request  that 
his  dissent  be  entered  on  the  minutes  of  the  directors.  If  ab- 
sent from  the  particular  meeting,  he  will  nevertheless  be  held 
liable  for  any  violations  of  the  Penal  Code  occurring  thereat, 
appearing  upon  the  minutes,  if  he  remains  a  director  for  six 
months  thereafter,  without  causing  his  dissent  to  be  entered 
on  the  minutes  within  that  period.  (S.  C.  L.,  §23;  Pen. 
Code,  §  614.) 

(See  next  section,  subdiv.  b,  for  directors'  liability  for 
loans  or  discounts,  etc.,  to  stockholders.  For  penalty  for  fail- 
ure to  file  reports,  see  Chap.  XVI,  "Reports.") 

§  124.     Directors'   Liability  to  Creditors. 

Although  the  New  York  reports  contain  many  decisions 
and  dicta  to  the  effect  that  "the  assets  of  the  corporation  are  a 
trust  fund  for  the  payment  of  creditors"  (Cole  v.  Millerton 
Iron  Co.,  133  N.  Y.  164  [1892]),  it  is  perhaps  safe  to  say 
that  there  is  no  decision  holding  directly  that  while  the  com- 
pany is  a  going  concern  any  trust  relations  exist  between  the 
directors  and  creditors. 

So  long  as  the  company  is  solvent,  the  creditors'  rights 
against  the  directors  are  almost  entirely  statutory.  These 
statutes  are  penal  and  therefore  strictly  construed.  Wiles  v. 
Suydam,  64  N.  Y.  173,  177  (1876).  The  liabilities  under  the 
statutes  are  as  follows: 


124  NEW    YORK    CORPORATIONS. 

(a)  For  making  illegal  dividends  directors  are  liable 
to  creditors.     (S.  C.  L.,  §  23.)     (See  §  123,  subdiv.  a.) 

(b)  Directors   and   officers   are   jointly   and   severally 
personally  liable  for  making  loans  to  stockholders,  for  dis- 
counting any  note  or  other  evidence  of  debt  for  stockholders, 
or  for  receiving  the  same  for  any  payment,  in  whole  or  in 
part,  due  or  to  become  due  on  any  stock  in  the  corporation, 
or  to  enable  any  stockholder  to  withdraw  any  part  of  the 
money  paid  in  by  him  on  his  stock.     (S.  C.  L.,  §  25.)     The 
directors  and  officers  involved  shall  "jointly  and  severally, 
be  personally  liable  to  the  extent  of  such  loan  and  interest, 
for  all  the  debts  of  the  corporation  contracted  before  the  re- 
payment of  the  sum  loaned,  and  to  the  full  amount  of  the 
notes  or  other  evidences  of  debt  so  received  or  discounted, 
with  interest  from  the  time  such  liability  accrued."      (Id.) 
Such  unlawful  action  is  also  a  misdemeanor  under  the  Penal' 
Code,  §  594.     A.  C.  Nellis  &  Co.  v.  Nellis,  62  Hun  63,  67 
(1891).  * 

(c)  Creditors,  who  became  such  upon  the  faith  of  a 
false  representation  made  in  any  corporate  certificate  or  re- 
port, can  hold  the  directors  who  signed  the  same  liable  for 
any  loss  occasioned  thereby.     Action  must  be  brought  within 
two  years  after  the  false  representation  was  made.     (S.  C. 
L.,  §  31.)     (See  §  123,  subdiv.  c.) 

Upon  insolvency,  creditors  can  enforce  any  liability 
which  a  director  has  incurred  through  fraud  or  negligence 
in  the  management  of  corporate  affairs  on  the  ground  that 
it  is  an  equitable  asset.  Morawetz  Private  Corp.,  §§  795,  796. 

(For  liability  as  trustees  on  dissolution,  see  §  120.) 

§  125.     Directors'   Meetings. 

Directors  may  act  for  the  corporation  only  in  duly  as- 
sembled meetings.  Except  for  ministerial  acts  prescribed  by 
statute,  such  as  signatures  to  certificates,  etc.,  this  rule  is 


DIRECTORS.  125 

invariable.  Individual  action  may  be  authorized  by  the  board, 
or,  if  taken,  may  be  subsequently  ratified,  but  in  all  cases  the 
action  must  be  by  the  board.  (G.  C.  L.,  §  39.) 

(a)  Place.     Meetings  may  be  held  at  such  place  with- 
in or  without  the  state  as  the  directors  select,  unless  they  are 
restricted  by  charter  or  by-laws.     (B.  C.  L.,  §  2.)     In  practice 
charter   restrictions   are   infrequent   and   the   by-laws,    while 
usually  fixing  the  place  for  directors'  meeting  at  some  place 
within  the  state — usually  at  the  principal  office — also  com- 
monly provide  that  meetings  may  be  held  at  any  time  and 
place  by  unanimous  consent  of  the  board. 

(b)  Notice.     Notice  for  both  regular  and  special  meet- 
ings should  be  provided  for  in  the  by-laws.     The  notice  need 
not  contain  a  statement  of  the  business  to  be  transacted  if 
it  is  not  unusual  in  character,  unless  such  statement  is  required 
by  the  by-laws.     Where  no  particular  purpose  is  specified, 
it  is  to  be  understood  that  it  is  called  to  consider  any  matters 
pertaining  to  the  conduct  of  the  corporate  affairs  that  may 
come  before  it.    In  re  Argus  Co.  v.  Manning,  138  N.  Y.  557, 
578  (1893).     Nevertheless  as  a  matter  of  good  practice  it  is 
customary — particularly  as  to  special  meetings — to  state  in 
the  notice  of  meeting,  any  important  business  to  be  transacted 
thereat.     Notice  of  meeting  may  be  waived  by  unanimous 
written  agreement,  and  is  held  to  be  waived  for  any  meeting 
without  notice,  if  all  are  present.     (G.  C.  L.,  §  39.) 

(c)  Quorum.     "Unless  otherwise  provided  by  law,  a 
majority  of  the  board  of  directors  of  a  corporation  at  a  meet- 
ing duly  assembled  shall  be  necessary  to  constitute  a  quorum 
for  the  transaction  of  business,  and  the  act  of  a  majority  of 
the  directors  present  at  a  meeting  at  which  a  quorum  is  pres- 
ent shall  be  the  act  of  the  board  of  directors.     The  members 
of  a  corporation  may  in  by-laws  fix  the  number  of  directors 
necessary  to  constitute  a  quorum  at  a  number  less  than  a 
majority  of  the  board,  but  at  least  equal  to  one-third  of  its 
number."     (G.  C.  L.,  §  29.) 


126  NEW    YORK    CORPORATIONS. 

(d)  Voting.  Directors  are  not  allowed  to  vote  by 
proxy.  Craig  Med.  Co.  v.  Bank,  59  Hun  561,  565  (1891). 
Unlike  stockholders  they  may  not  vote  upon  matters  in  which 
they  are  personally  interested.  Copeland  v.  Mfg.  Co.,  47 
Hun  235  (1888). 

§  126.     Standing  Committees. 

Although  there  is  no  express  statutory  authority  therefor, 
the  delegation  of  details  of  management  to  standing  com- 
mittees of  directors  is  practiced  and  sanctioned  in  New  York. 
Olcott  v.  Tioga  Ry.  Co.,  27  N.  Y.  546,  557  (1863) ;  Sheridan 
El.  Lt.  Co.  v.  Bank,  127  N.  Y.  517  (1891). 

Such  committees  are  held  allowable  under  the  general 
statutory  power  of  the  corporation  to  appoint  such  officers  and 
agents  as  its  business  shall  require.  (G.  C.  L.,  §  n.)  They 
are  also  frequently  created  by  charter  provision  under  the 
general  clause  permitting  "any  other  provision  for  the  regula- 
tion of  the  business  and  the  conduct  of  the  affairs  of  the 
corporation."  (B.  C.  L.,  §  2.) 

In  the  absence  of  statutory  provision,  the  composition, 
powers  and  duties  of  the  standing  committees  are  usually 
regulated  by  charter  or  by-law  provision,  though  the  whole 
matter  is  sometimes  left  to  the  board,  the  by-laws  merely 
empowering  them  to  act. 


CHAPTER  XII. 
OFFICERS. 


§  127.     The  Corporate  Officers. 

"  The  directors  of  a  stock  corporation  may  appoint  from 
their  number  a  president,  and  may  appoint  a  secretary,  treas- 
urer, and  other  officers,  agents  and  employees,  who  shall 
respectively  have  such  powers  and  perform  such  duties 
in  the  management  of  the  property  and  affairs  of  the  corpora- 
tion, subject  to  the  control  of  the  directors,  as  may  be  pre- 
scribed by  them  or  in  the  by-laws."  (S.  C.  L.,  §  27.) 

The  essential  officers  of  a  corporation  are  the  president, 
secretary  and  treasurer.  These,  though  not  specifically  re- 
quired by  the  statutes,  are  necessary  to  meet  their  general 
requirements  as  to  reports,  signatures,  etc.  In  addition  to  the 
three  officers  mentioned,  vice-presidents,  assistant  secretaries 
and  treasurers,  the  managing  director  or  general  manager, 
the  auditor  and  the  counsel  are  usually  classed  as  officers  as 
distinguished  from  agents  and  employees,  and  also  from  the 
directors,  who,  while  technically  officers  of  the  corporation, 
are  not  usually  so  designated. 

The  same  person  may  hold  more  than  one  office  if  the 
duties  of  such  offices  are  compatible.  Novelty  Co.  v.  Connell, 
88  Hun  254,  257  (I895).1 

§  128.     Qualifications. 

The  president  must  be  a  director.  (S.  C.  L.,  §  27.)  This 
is  a  statutory  declaration  of  a  rule  of  convenience  which  would 

!See  also  Manhattan  Co.  v.  Kaldenberg,  165  N.  Y.  1,  11    (1900),  where 
one  person  held  the  offices  of  president,  secretary  and  treasurer. 

127 


128  NEW    YORK    CORPORATIONS. 

obtain  in  the  great  majority  of  cases  without  its  enactment. 
As  the  presiding  officer  of  the  board  of  directors,  it  is  im- 
perative that  he  should  be  a  member.  He  need  not  be  a 
stockholder  if  provision  is  made  in  the  by-laws  relieving  di- 
rectors from  the  necessity  of  holding  stock.  If,  however,  as 
is  usually  the  case,  he  is  to  preside  over  stockholders'  meetings, 
he  should  also  be  a  stockholder. 

There  are  no  special  statutory  qualifications  for  the  other 
officers.  They  may  or  may  not  be  directors  or  stockholders. 
If,  however,  the  vice-president  is  to  act  in  case  of  the  absence 
or  disability  of  the  president,  he  too  should  be  a  director. 
(S.  C.  L.,  §  27.) 

§  129.     Security. 

The  directors  may  require  officers  to  give  security  for  the 
faithful  discharge  of  their  duties.  (S.  C.  L.,  §  27.)  This  is 
usually  confined  to  the  bond  required  of  the  treasurer,  but  is 
extended  to  other  officials  when  conditions  render  such  action 
advisable.  (See  Form  62.) 

§  130.     Powers. 

The  mere  fact  that  certain  persons  are  officers  of  a  cor- 
poration gives  them  no  authority  over  the  corporate  business 
or  property.  Cook  on  Corporations,  §  716.  Their  powers 
are  derived  entirely  from  enabling  provisions  in  the  charter 
and  by-laws  and  from  resolutions  of  the  board  of  directors. 
Usually  their  powers  are  conferred  and  defined  by  the  by- 
laws. The  directors,  however,  either  by  express  resolution 
or  by  acquiescence  in  a  course  of  action,  may  clothe  them 
with  power  to  act  for  the  company  in  the  performance  of  any 
act  within  the  charter  powers  not  otherwise  assigned  by  char- 
ter or  by-laws.  Hall  v.  Ochs,  34  App.  Div.  103  (1898). 

Just  how  much  authority  the  officers  have  in  any  particu- 
lar matter  is  a  question  of  fact  to  be  determined  in  each  case. 


OFFICERS.  129 

Hastings  v.  Ins.  Co.,  138  N.  Y.  473,  479  (1893).  It  should 
be  borne  in  mind  that,  in  the  performance  of  their  ditties, 
the  officers  are  agents  of  the  company.  Their  acts  are  there- 
fore to  be  considered  in  the  light  of  the  well  settled  rules  of 
agency  that  an  agent  is  invested  with  authority  to  do  all  acts 
incidental  to  the  proper  discharge  of  his  duties,  and  that  third 
persons  are  entitled  to  rely  upon  the  apparent  authority  con- 
ferred upon  him  by  the  principal.  Lee  v.  Coal  Co.,  56  How. 

Pr.  373  (1877)- 

The  New  York  courts  have  recognized  the  practical  ne- 
cessity of  following  business  usage  and  have  applied  the  doc- 
trine of  "apparent  authorization"  even  more  broadly  to  the 
acts  of  corporate  officers  than  to  those  of  ordinary  agents. 
The  following  extract  from  the  opinion  in  Lee  v.  Pittsburgh 
Coal  Co.,  supra,  p.  377,  shows  their  attitude: 

"  It  is  very  difficult,  if  not  impossible,  for  those  having 
dealings  with  corporate  bodies  to  determine,  except  from 
circumstances  and  inference,  what  authority  officers  have. 
*  *  *  It  often  happens — so  often  as  to  be  the  rule  rather 
than  the  exception — that  the  chief  officers  of  a  corporation 
exercise  a  very  wide  range  of  powers,  virtually  grasping  the 
entire  direction  and  control  of  all  its  operations,  with  the  tacit 
consent  and  approval  of  the  corporation.  *  *  *  Ought 
not  the  same  evidence,  upon  which  prudent  business  men 
ordinarily  infer  the  existence  of  the  authority,  to  be  satisfac- 
tory to  courts  and  juries?  " 

It  is  the  well  settled  rule  in  this  state  that  if  the  president 
or  other  general  officer  of  a  corporation  makes  a  contract  on 
behalf  of  the  company  of  a  nature  which  the  directors  might 
have  authorized,  or  which  they  could  ratify  when  made,  au- 
thority will  be  presumed  and  the  burden  rests  upon  the  cor- 
poration of  showing  the  contrary.  Hudson  River  Ry.  Co.  v. 
Hanfield,  36  App.  Div.  605,  507  (I897).1 

1-Vid.  also  Oakes  v.  Water  Co.,  143  N.  T.  430   (1894);  Patteson  v.  Ong- 
ley  Electric  Co.,   87  Hun  462,   464    (1895). 


I3O  NEW    YORK    CORPORATIONS. 

Although  it  is  possible  to  define  and  limit  the  authority 
of  officers  in  the  by-laws,  these  are  as  to  third  persons,  private 
regulations,  binding  upon  those  who  have  knowledge  of  them, 
but  "of  no  force  as  limitations  per  se  as  to  third  persons  of  an 
authority,  which,  except  for  the  by-law,  would  be  construed 
as  within  the  apparent  scope  of  the  agency."  Rathbun  v. 
Snow,  123  N.  Y.  343,  349  (1890) ;  Newman  v.  Lee,  87  App. 
Div.  116,  118  (1903). 

It  is  impossible  to  formulate  any  general  rule  as  to  what 
acts  are  within  the  power  of  the  various  officers.  Each  case 
presents  a  question  of  fact  to  be  tested  by  the  rules  of  specific, 
implied  and  apparent  authorization. 

It  may  be  stated  broadly,  however,  that  a  corporate 
official  will  be  presumed  to  have  any  power  claimed  or  exer- 
cised by  him,  within  the  reasonable  scope  of  the  customary 
duties  of  such  officials,  if  such  authority  is  not  denied  by  the 
corporation.  This  is  the  rule,  notwithstanding  the  absence  of 
any  real  authority,  or  even  the  existence  of  provisions  of  the 
by-laws  or  resolutions  of  the  board  to  the  direct  contrary. 
(See  next  section  as  to  liability  of  officers  for  unauthorized 
action.) 

§  131.     Personal  Liabilities  of  Officers. 

(a)  To  the  Corporation.  Corporate  officers,  as  agents 
of  the  company,  are  subject  to  the  general  rule  which  imposes 
upon  an  agent  who  exceeds  his  authority,  liability  for  dam- 
ages resulting  to  his  principal.  Holmes  v.  Willard,  125 
N.  Y.  75,  80  (1890).  They  owe  to  the  company  the  duty 
of  exercising  ordinary  business  skill  and  prudence  (Hun  v. 
Gary,  82  N.  Y.  65  [1880])  and  are  liable  for  losses  of  cor- 
porate funds  or  property  due  to  their  failure  to  exercise  it. 
Brinckerhoff  v.  Bostwick,  88  N.  Y.  52  (1882). 

They  are  liable  for  misappropriating  corporate  property 
even  though  they  own  substantially  all  the  stock.  Saranac 


OFFICERS.  131 

Ry.  v.  Arnold,  167  N.  Y.  368,  374  (1901).  (Pen.  Code, 
§611.) 

(b)  To  Third  Persons.     It  is  well  settled  in  New  York 
that  corporate  officers,  in  dealing  with  the  world,  impliedly 
warrant  that  they  have  authority  to  do  the  acts  which  they 
undertake.     If,  therefore,  they  exceed  their  authority,  they 
are  liable  for  all  damages  resulting  from  their  want  of  power. 
Taylor  v.  Nostrand,  134  N.  Y.   108,  no  (1892);  Miller  v. 
Reynolds,  92  Hun  400  (1895). 

Officers  should  be  careful  in  signing  corporate  contracts 

to  use  the  form  "The    Company  by  John  Jones, 

President."  Any  signature  which  does  not  clearly  show  the 
agency,  may  result  in  personal  obligation.  Bank  v.  Wallis, 
150  N.  Y.  455  (1896).  (See  Form  37.) 

(c)  Penal  Statutory  Liability.     The   liability  of   cor- 
porate officers  for  the  offenses  indicated  is  as  follows : 

1 i )  Wilful  neglect  or  refusal  to  make  proper  entry 
in  corporate  books  or  to  allow  inspection  of  same :   Fine 
of  not  over  $500,  or  imprisonment  not  over  one  year,  or 
both ;  also  a  penalty  of  $50  for  each  offense  and  liability 
for  all  resulting  damages  to  person  injured.     (S.  C.  L., 
§29;  Pen.  Code,  §§  15,  6n.) 

(2)  Signing  certificate,  report  or  public  notice  false 
in  any  material  respect :  Fine,  not  over  $500,  or  imprison- 
ment not  over  one  year,  or  both,  and  collateral  liability 
for  two  years  to  those  who  became  stockholders  because 
of  such  false  presentation.     (S.  C.  L.,  §  31;  Pen.  Code, 
§§  15,  611.) 

(3)  Fraudulent  issue  of  stock:  Fine  of  not  over 
$3,000,  or  imprisonment  not  exceeding  seven  years,  or 
both.     (Pen.  Code,  §  591.) 

(4)  Participating  in  issue  of  stock  beyond  amount 
authorized,  or  selling  stock  of  which  they  are  not  the 
actual  owners:  Fine,  not  over  $5,000,  or  imprisonment 
not  less  than  six  months,  or  both.     (Pen.  Code,  §  610.) 


132  NEW    YORK    CORPORATIONS. 

(5)  Transfer  of  corporate  property  in  contempla- 
tion of  insolvency:  Liability  for  all  resulting  loss.     (S. 
C.  L.,  §48.) 

(6)  Appropriating  corporate  property,   except   in 
payment  of  a  just  demand,  without  making  true  entry 
on  the  records :  Fine,  not  over  $500,  or  imprisonment  not 
exceeding  one  year,  or  both.     (Pen.  Code,  §§  15,  611.) 

(7)  Exhibiting  false  document  to  public  officer: 
Imprisonment  in  state  prison  not  exceeding  ten  years. 
(Pen.  Code,  592.) 

(8)  Making  loans  to  stockholders,  or  taking  their 
notes  in  payment  of  stock  subscriptions,  or  to  enable  them 
to  withdraw  money  paid  in  by  them  on  subscriptions : 
Liability  for  corporate  debts  contracted  while  loan  is  out- 
standing,  to   amount  of   loan   and    interest  and   to   the 
amount  of  the  notes  with  interest.     (S.  C.  L.,  §  25.) 

(9)  Refusal  or   neglect  to   make  report  lawfully 
required  by  a  public  officer:  Fine  of  not  over  $500,  or 
imprisonment  not  exceeding  one  year,  or  both.      (Pen. 
Code,  §§  15,  611.) 

(10).  Failure  to  give  notice  to  officers  and  directors 
of  receipt  of  injunction  notice:  Fine  of  not  over  $500, 
or  imprisonment  not  exceeding  one  year,  or  both.  (Pen. 
Code,  §§  15,  6n.) 

§  132.     Tenure  of  Office. 

Officers  hold  their  respective  official  positions  only  for 
the  term  for  which  they  were  elected  unless,  as  is  usually  the 
case,  provision  is  made  in  the  charter  or  by-laws  that  they 
hold  office  until  the  election  of  their  successors.  They  may 
be  removed  at  any  time,  with  or  without  cause,  by  the  board 
of  directors.  (S.  C.  L.,  §  27.) 

An  officer  may  terminate  his  relations  with  the  company 
by  resignation.  If  made  in  absolute  terms  this  will  take  effect 
immediately  and  does  not  require  acceptance  on  the  part  of 
the  corporation  to  render  it  effective.  Wilson  v.  Hotel  Co., 
16  Misc.  48  (1896);  Manhattan  Co.  v.  Kaldenberg,  165  N. 
Y.  i,  10  (1900). 


OFFICERS.  133 


133.     Compensation. 


A  person  who  is  a  director  or  stockholder  as  well  as  an 
officer  is  not  entitled  to  compensation  for  performing  the 
duties  of  his  office  unless  he  has  made  a  contract  to  that  effect 
with  the  company.  Farmers  L.  &  T.  Co.  v.  Ry.,  152  N.  Y. 
251,  254  (1897).  It  is  presumed  that  he  is  working  for  the 
general  welfare  of  the  company  and  not  in  expectation  of 
receiving  personal  compensation.  One  who  has  no  personal 
interest  in  the  company  may,  however,  recover  what  his 
services  as  an  officer  were  reasonably  worth,  even  in  the  ab- 
sence of  a  definite  agreement.  Smith  v.  Ry.,  102  N.  Y.  191, 
194  (1886).  (See  §  118.) 


CHAPTER  XIII. 
PRINCIPAL  OFFICE.     CORPORATE  BOOKS. 


§  134.     Location  of  Principal  Office. 

The  certificate  of  incorporation  must  contain  a  statement 
of  the  city,  village  or  town  in  which  the  company's  principal 
business  office  is  to  be  located.  If  it  is  to  be  in  the  City  of 
New  York,  the  borough  must  be  designated.  (B.  C.  L.,  §  2, 
subdiv.  5.)  No  exact  address  is  required.  This  lack  of  defi- 
niteness,  while  a  weak  spot  in  the  law,  is  occasionally  very 
convenient  for  the  incorporators. 

The  principal  office  must  be  within  the  state  and  the 
charter  statement  is  conclusive  evidence  as  to  its  location  un- 
til such  location  is  changed  by  regular  amendment.  (See 
§  72.)  Edison  Elec.  Lt.  Co.  v.  Barker,  91  Hun  594  (1895). 
"Office"  and  "place  of  business"  are  used  interchangeably  in 
the  statutes,  both  meaning  the  official  domicile  of  the  company 
as  fixed  in  the  manner  indicated.  (G.  C.  L.,  §  3,  subdiv.  9.) 
Special  elections  of  directors  must  be  held  in  the  principal 
office  (G.  C.  L.,  §  25),  and  the  corporate  records  must  be 
kept  there.  (S.  C.  L.,  §  29.)  Its  location  fixes  the  tax  dis- 
trict in  which  the  personal  property  of  the  corporation  is 
assessed.  (Tax  Law,  §  n.) 

§  135.     Corporate  Books. 

Every  business  corporation  must  keep  at  its  principal 
office,  books  containing  correct  accounts  of  its  business  and 
transactions,  and  a  book  to  be  known  as  the  stock  book.  (S. 

134 


PRINCIPAL  OFFICE.      CORPORATE  BOOKS.  135 

C.  L.,  §  29.)  The  stock  book  is  the  only  book  thus  specifically 
prescribed.  The  needs  of  the  corporation  and  business  cus- 
tom and  convenience  determine  what  others  shall  be  kept. 

§  136.     The  Stock  Book. 

The  stock  book  must  contain  the  names  of  the  stock- 
holders arranged  in  alphabetical  order  showing  their  places  of 
residence,  the  number  of  shares  of  stock  owned  by  each,  the 
time  when  they  became  the  holders  thereof  and  the  amounts 
paid  thereon.  (S.  C.  L.,  §  29.) 

The  stock  book  is  thus  the  official  record  of  the  relations 
existing  between  the  corporation  and  its  members.  No  trans- 
fer of  stock  is  valid  as  against  the  corporation,  its  creditors  or 
stockholders — except  to  render  the  transferee  liable  as  a 
stockholder — until  such  transfer  is  entered  in  the  stock  book 
in  a  manner  to  show  from  and  to  whom  the  stock  is  trans- 
ferred. It  is  made  presumptive  evidence  of  the  facts  it  con- 
tains in  any  action  or  proceeding  against  the  corporation,  its 
officers  or  stockholders  (S.  C.  L.,  §29;  Bank  v.  Scott,  53 
App.  Div.  65,  71  [1900]),  and  is  conclusive  evidence  of  the 
right  to  vote  at  stockholders'  meetings.  (G.  C.  L.,  §  20.) 

A  penalty  is  imposed  upon  the  corporation  for  failure  to 
keep  a  stock  book,  or  to  keep  it  open  for  inspection  as  above 
set  forth,  of  $50  a  day  during  the  continuance  of  the  refusal. 
If  any  officer  or  agent  of  the  corporation  wilfully  neglects  or 
refuses  to  make  proper  entries  in  the  stock  book,  or  to  exhibit 
the  book  and  allow  extracts  to  be  made  from  it,  in  accordance 
with  the  requirements  already  set  forth,  both  the  officer  or 
agent  and  the  corporation  are  liable  to  the  party  injured  to 
the  amount  of  $50  for  each  offense  and  also  for  any  damages 
resulting  to  him  from  such  failure  or  refusal.  (S.  C.  L.,  §  29; 
Pen.  Code,  §611.)  (See  §  131.)  The  adoption  of  a  stock 
book  is  the  duty  of  the  board  of  directors  and  they  may  at 
any  time  adopt  a  new  book  if  the  old  one  is  not  available. 


136  NEW    YORK    CORPORATIONS. 

In  re  Argus  Co.,  138  N.  Y.  557,  576  (1893);  Socorro  Mt. 
Co.  v.  Preston,  17  Misc.  220  (1896).     (See  Forms  34,  35.) 

§  137.     Right  to  Inspect  Corporate  Books. 

The  stock  book  must  be  kept  open  at  the  principal  office 
of  the  company  during  at  least  three  business  hours  daily  for 
the  inspection  of  stockholders  and  judgment  creditors,  who 
may  make  extracts  therefrom.  (S.  C.  L.,  §  29.)  This  is  an 
absolute  statutory  right  and  if  refused  nothing  is  left  to  the 
discretion  of  the  court  but  to  issue  a  writ  of  mandamus  upon 
proper  application  being  made  therefor.  Matter  of  Steinway, 
IS9N.  Y.  250,  263  (1899). 

It  was  long  doubted  whether  this  statute  did  not  prevent 
the  Supreme .  Court  from  granting  an  order  to  examine  any 
other  of  the  corporate  books.  The  question  was  decided  defi-1 
nitely  by  the  Matter  of  Steinway,  supra,  p.  265,  where  it  was 
held  that  the  common  law  right  of  a  stockholder  to  inspect 
the  books  of  his  corporation  at  a  proper  time  and  place  and 
for  a  proper  purpose  still  exists,  and  that  "the  Supreme  Court 
has  power,  in  its  sound  discretion  upon  good  cause  shown  to 
enforce  the  right." 

The  broad  language  of  the  decision  cited  created  a  wide- 
spread impression  that  a  stockholder  was  entitled  to  examine 
the  books  of  the  corporation  for  any  purpose  and  to  any 
extent.  Matter  of  Col  well,  76  App.  Div.  615  (1902),  per 
O'Brien,  J.  The  right  is  not,  however,  an  absolute  one. 
Such  relief  will  be  granted  only  for  some  purpose  necessary 
for  the  stockholder's  protection.  People  ex  rel  Mackey  v. 
Ins.  Co.,  31  Misc.  617  (1900).  It  is  a  drastic  remedy  "not 
to  be  granted  except  in  an  emergency  or  for  a  necessary  pur- 
pose and  should  be  limited  by  some  regard  to  the  interests  of 
the  corporation  and  its  other  stockholders."  Matter  of  Col- 
well,  supra.  If,  therefore,  the  information  required  in  any 
particular  case  can  be  obtained  in  any  other  way,  as  for  ex- 


PRINCIPAL  OFFICE.      CORPORATE  BOOKS.  137 

ample  from  a  financial  statement  of  the  treasurer  filed  on 
proper  demand  in  accordance  with  the  statutory  requirements 
(.S.  C.  L.,  §  52),  it  should  be  resorted  to  in  preference  to 
applying  for  a  writ  of  mandamus. 

The  court  will  always  consider  the  motive  of  the  stock- 
holder in  any  case  where  the  remedy  is  discretionary.  In  re 
Pierson,  44  App.  Div.  215  (1899);  People  ex  rel  McElwee 
v.  Produce  Ex.  Co.,  53  App.  Div.  93  (1900);  Matter  of 
Coats,  73  App.  Div.  178  (1902).  The  stockholder  may  em- 
ploy another  to  make  any  authorized  examination  for  him, 
or  to  aid  him  in  making  it.  People  ex  rel  Clason  v.  Ferry 
Co.,  86  Hun  128  (1895). 


CHAPTER  XIV. 
STATE  TAXATION. 


§  138.     Franchise  Tax. 

"  Every  corporation  *  *  *  incorporated,  organized 
or  formed  under,  by  or  pursuant  to  law  in  this  state,  shall  pay 
to  the  state  treasurer  annually,  an  annual  tax  to  be  computed 
upon  the  basis  of  the  amount  of  its  capital  stock  employed 
within  this  state  *  *  *  Every  corporation  *  *  *  or- 
ganized, incorporated  or  formed  under  the  laws  of  any  other, 
state  or  country,  shall  pay  a  like  tax  for  the  privilege  of  exer- 
cising its  corporate  franchises  or  carrying  on  its  business  in 
such  corporate  or  organized  capacity  in  this  state,  to  be  com- 
puted upon  the  basis  of  the  capital  employed  by  it  within  this 
state."  (Tax  Law,  §  182.) 

This  tax  is  entirely  different  from  the  "Special  Franchise 
Tax"  imposed  upon  corporations  entitled  to  use  the  public 
streets  or  other  public  places.  It  is  imposed  upon  all  corpora- 
tions of  every  kind  and  is  paid  by  corporations  subject  to 
special  franchise  taxes,  in  addition  to  that  tax. 

The  theory  upon  which  the  taxation  of  corporations  for 
state  purposes  has  been  adjusted,  is  that  the  legislature  has 
the  right  to  tax  corporations  for  the  privilege  of  doing  busi- 
ness in  New  York,  aside  from  all  property  taxation.  The 
tax  is  therefore  purely  a  statutory  exaction  and  is  in  addition 
to  the  usual  property  taxes  which  must  also  be  paid  by  cor- 
porations. 

The  franchise  tax,  when  imposed  on  a  domestic  corpora- 
tion, is  a  tax  on  its  corporate  franchises;  when  imposed  on 

138 


STATE  TAXATION.  139 

a  foreign  corporation,  it  is  a  tax  on  its  business ;  a  distinction 
based  on  the  fact  that  corporate  franchises  are  taxable  only 
within  the  jurisdiction  which  creates  them,  and  where  alone 
they  can  be  said  to  have  a  situs.  People  v.  Home  Insurance 
Co.,  92  N.  Y.  328,  340  (1883).  Foreign  corporations  have 
no  absolute  right  to  admission  to  the  state,  however,  and  the 
legislature  may  therefore  impose  any*  condition  upon  granting 
them  the  privilege  that  it  sees  fit.  Pembina  Mining  Co.  v. 
Pa.,  125  U.  S.  181  (1889);  People  ex  rel  U.  S.  A.  Co.  v. 
Knight,  174  N.  Y.  475  (1903). 

The  tax  is  not  a  property  tax,  but  is  an  operating  tax, 
based  upon  the  business  transacted  by  the  company  in  the 
state,  as  shown  by  the  amount  of  capital  employed  here.  This 
is  a  distinction  of  great  importance  and  easily  overlooked. 
The  rate  of  the  tax  is  graduated  according  to  business  pros- 
perity evidenced  by  dividends  declared. 

"As  dividends  can  be  legally  made  only  out  of  earnings 
or  profits,  and  cannot  be  made  out  of  capital,  they  are  assumed 
to  approximate  as  nearly  as  practicable  the  just  rneasure  of 
the  tax  which  should  be  imposed  upon  the  corporation  for 
the  enjoyment  of  its  franchise."  People  v.  Albany  Insurance 
Co.,  92  N.  Y.  458,  461  (1883). 

§  139.     "Capital  Stock  Employed  within  the  State." 

The  franchise  tax  is  imposed  only  on  "the  capital  stock 
employed  within  the  state."  A  corporation  organized  in  New 
York  but  operating  and  employing  all  its  capital  elsewhere 
would  therefore  pay  no  franchise  tax  in  this  state. 

"Capital  stock"  for  franchise  tax  purposes  means,  not 
share  stock,  but  the  assets  of  the  corporation  contributed  by 
the  stockholders.  This  does  not  include  surplus  which  may 
therefore  be  employed  in  the  state  without  liability  for  fran- 
chise tax.  That  is,  the  amount  upon  which  the  franchise  tax 
is  calculated  may  not  exceed  the  par  value  of  the  company's 


I4O  NEW    YORK    CORPORATIONS. 

stock,  any  amount  in  excess  not  being  liable.  People  ex  rel 
U.  M.  C.  Co.  v.  Roberts,  156  N.  Y.  585  (1898)  ;  People  ex 
rel  Wiebusch  v.  Roberts,  154  N.  Y.  101,  106  (1897). 

§  140.     Deduction  of  Debts. 

Since  the  franchise  tax  is  based  upon  the  actual  value  of 
the  capital  employed  in  the  state,  allowance  must  be  made  for 
corporate  indebtedness.  If  all  the  corporation's  property  and 
business  is  within  the  state,  its  total  indebtedness  may  be 
deducted.  People  ex  rel  J.  B.  Co.  v.  Roberts,  37  App.  Div. 
i  (1899).  Where,  however,  only  a  portion  of  its  capital  is 
employed  in  the  state,  only  a  proportionate  amount  of  debts 
may  be  subtracted  from  its  assessed  valuation.  People  ex 
rel  Hyde  &  Sons  v.  Miller,  90  App.  Div.  599  (1904)  ;  AfTd. 
179  N.  Y.  564. 

§  141.     United  States  Securities. 

The  fact  that  the  franchise  tax  is  not  upon  property  but 
upon  business,  the  property  values  being  used  merely  as  a  basis 
for  estimation,  allows  money  invested  in  United  States  securi- 
ties to  be  included  in  the  capital  taxable  under  §  182  of  the 
Tax  Law,  even  though  the  securities  themselves  are  exempt 
from  state  taxation.  Home  Insurance  Co.  v.  N.  Y.,  134  U. 
S.  594  (1890).  Hence,  United  States  bonds  owned  by  the 
corporation  may  not  be  deducted  in  determining  the  amount 
of  capital  for  purposes  of  franchise  taxation. 

§  142.     Patents  and  Copyrights. 

The  same  is  true  of  patents  and  copyrights,  which,  though 
not  taxable  themselves,  are  as  a  constituent  part  of  the  com- 
pany's assets,  included  in  determining  the  value  of  its  capital. 
U.  S.  Aluminum  Plate  Co.  v.  Knight,  174  N.  Y.  475  (1903). 


STATE  TAXATION.  14! 


143.     Good  Will. 


The  good  will  of  the  corporate  business  is  also  included 
as  part  of  the  capital  employed  in  the  state.  It  is  not  improper 
in  estimating  its  value  to  take  the  price  paid  for  it  as  its  true 
worth.  People  ex  rel  Keochl  &  Co.  v.  Morgan,  96  App. 
Div.  no  (1904). 

§  144.     Meaning  of  "Employed  within  the  State." 

The  meaning  of  "employed  within  the  state"  has  been 
the  subject  of  much  judicial  interpretation.  Capital  is  "em- 
ployed within  the  state"  when  it  is  kept  and  used  here  for  the 
purposes  of  the  corporation.  People  ex  rel  Edison  Elec.  Lt. 
Co.  v.  Campbell,  138  N.  Y.  546  (1893).  It  must  be  actively 
used  in  the  company's  business.  If,  for  example,  it  is  invested 
in  unproductive  real  estate,  the  corporation  cannot  be  taxed 
upon  it  under  the  existing  law.  People  ex  rel  Niagara  River 
Hydraulic  Co.  v.  Roberts,  30  App.  Div.  180;  Affd.  157  N. 
¥.676  (1899). 

Money  invested  outside  the  state  either  in  real  estate,  in 
stock  or  bonds,  is  not  employed  in  the  state  even  though  the 
income  be  received  at  the  home  office  in  New  York  and  there 
used.  People  ex  rel  Am.  Surety  Co.  v.  Campbell,  74  Hun 
101,  Affd.  143  N.  Y.  625  (1894)  ;  People  ex  rel  Edison  Co. 
v.  Campbell,  138  N.  Y.  543  (1893). 

So,  too,  any  property  having  a  permanent  situs  outside 
the  state  cannot  in  any  way  be  included  as  capital  employed 
within  the  state.  People  v.  Campbell,  88  Hun.  544  (1895). 

Where  the  amount  of  capital  employed  within  the  state 
fluctuates,  the  average  is  taken.  People  ex  rel  Brooklyn  R. 
T.  Co.  v.  Morgan,  57  App.  Div.  335  (1901). 

The  comptroller  has  ruled  that  no  rebate  will  be  allowed 
where  capital  has  been  employed  in  the  state  for  less  than  a 
year.  Thus  a  company  which  has  employed  capital  in  New 
York  for  one  month  only,  prior  to  the  date  of  assessment,  is 


142  NEW    YORK    CORPORATIONS. 

compelled  to  pay  on  the  basis  of  an  equal  amount  as  used  for 
a  year;  a  holding  which  might  well  be  contested  under  the 
reasoning  used  in  the  case  of  Brooklyn  R.  T.  Co.  v.  Morgan, 
cited  above.  A  corporation  organized  during  the  tax  year  is, 
however,  as  a  matter  of  practice,  taxed  only  for  such  part  of 
the  year  as  it  is  in  existence. 

§  145.     Classification    of    Corporations    for    Purposes    of 
Franchise  Taxation. 

The  statute  in  effect  divides  all  corporations  both  domes- 
tic and  foreign  into  three  classes  for  the  purpose  of  franchise 
taxation. 

(1)  Those  which  have  paid  on  the  par  value  of 
their  capital  stock  employed  within  the  state,  a  dividend 
of  six  per  cent,  or  over,  for  the  current  year  ending  Octo- 
ber 3 1  st. 

(2)  Those  which  have  paid  a  dividend  less  than 
six  per  cent. 

(3)  Those  which  have  paid  no  dividends.     (Tax 
Law,  §  182.) 

§146.     (i)  Corporations  Paying  Dividends  Not  Less  Than 
Six  Per  Cent. 

If  dividends  of  six  per  cent.,  or  over,  have  been  paid 
during  the  year  ending  October  3ist,  the  tax  is  for  each  one 
per  cent,  of  dividend  paid,  one-fourth  of  one  mill  on  each 
dollar  of  capital  employed  in  the  state.  For  example,  if  a 
company  employs  $100,000  of  capital  in  the  state  upon  which 
it  pays  dividends  of  six  per  cent.,  the  tax  is  one  and  one-half 
mills  on  each  dollar  of  capital  or  $150.  If  the  dividends  are 
ten  per  cent.,  the  tax  would  be  at  the  rate  of  two  and  one- 
half  mills  or  $250.  The  dividends  are  used  to  fix  the  rate  of 
taxation  without  regard  to  whether  they  have  been  earned 
within  or  without  the  state.  People  ex  rel  N.  E.  Dressed 


STATE  TAXATION.  143 

Meat  Co.  v.  Roberts,   155  N.  Y.  408.     (For  table  showing 
this  tax  on  various  capitalizations,  see  §  14.) 

§  147.     (2)  Corporations  Paying  Dividends  Less  Than  Six 
Per  Cent. 

If  dividends  amount  to  less  than  six  per  cent.,  "the  tax 
shall  be  at  the  rate  of  one  and  one-half  mills  upon  such  portion 
of  the  capital  stock  at  par  as  the  amount  of  capital  employed 
within  the  state  bears  to  the  entire  capital  of  the  corporation." 
(Tax  Law,  §  182.)  It  has  been  judicially  decided  (People 
ex  rel  N.  Y.  C.  Ry.  v.  Knight,  173  N.  Y.  255  [1903])  that 
this  section  of  the  Tax  Law  must  be  read  in  connection  with 
§  190  of  the  same  law,  which  provides  that  the  secretary  or 
treasurer  of  the  company  shall  report  to  the  state  comptroller 
his  estimate  of  the  actual  cash  value  of  the  capital  stock  upon 
which  a  dividend  of  less  than  six  per  cent,  has  been  declared, 
not  less  than  the  average  price  for  which  such  stock  sold  dur- 
ing the  year. 

The  net  result  is  that  §  182  prescribes  the  manner  of 
determining  the  portion  of  capital  to  be  taxed  and  §  190  pro- 
vides that  the  tax  shall  be  levied  on  the  actual  and  not  the 
par  value  of  the  amount  so  determined.  For  example,  "A 
corporation  with  a  capital  stock  of  $500,000  par  value  might 
have  assets  of  the  value  of  $250,000,  of  which  $150,000  were 
employed  in  business  in  this  state.  In  such  a  case  if  the  cor- 
poration had  no  peculiar  franchise  or  exceptional  good  will 
or  earning  power,  the  market  value  of  its  stock  would  ap- 
proximate to  50,  but  if  the  company  were  well  managed  it 
might  be  60  or  70.  In  computation  for  a  franchise  tax  it 
would  not  be  reasonable  to  estimate  the  $150,000  of  assets  at 
70,  the  market  value  of  the  share  stock,  nor  even  at  their  full 
value.  The  assets  employed  in  this  state  would  be  three-fifths 
of  the  total  assets  of  the  corporation;  therefore  three-fifths 
of  the  share  capital  of  the  corporation  or  $300,000,  should  be 
considered  as  being  employed  within  this  state. 


144  NEW    YORK    CORPORATIONS. 

"  It  is  this  rule  that  the  statute  intended  to  prescribe  by 
the  provision  that  the  tax  shall  be  'upon  such  portion  of  the 
capital  stock  at  par  as  the  amount  of  the  capital  employed 
within  this  state  bears  to  the  entire  capital  of  the  corporation.' 
But  having  determined  the  $300,000  of  capital  stock  is  to  be 
deemed  as  employed  within  this  state  then  that  capital  stock 
is  under  §  190  to  be  taken  at  'its  actual  cash  value'  for  the 
purpose  of  computing  the  franchise  tax."  People  ex  rel  N. 
Y.  &  E.  R.  F.  Co.,  1 68  N.  Y.  14,  17  (1901),  per  Cullen,  J. 
If  the  stock  were,  as  supposed,  worth  70,  then  the  amount 
upon  which  the  franchise  tax  in  the  example  given  would  be 
estimated  on  $210,000,  the  actual  cash  value  of  the  capital 
stock  deemed  to  be  employed  in  the  state. 

If  there  are  two  or  more  classes  of  stock  of  any  corpora- 
tion, the  tax  is  apportioned  by  the  rule  stated,  in  accordance 
with  the  rate  of  dividend  declared  upon  each.  People  ex  rd 
Journeay  &  Burnham  v.  Roberts,  37  App.  Div.  i  (1899). 

§  148.     (3)  Corporations  Paying  No  Dividends. 

When  no  dividend  has  been  declared,  the  franchise  tax 
is  one  and  one-half  mills  on  each  $i  of  the  appraised  capital 
employed  within  the  state.  (Tax  Law,  §  182.) 

The  secretary  or  treasurer  of  the  company  must  make  the 
same  report  to  the  comptroller  as  in  the  case  where  dividends 
were  less  than  six  per  cent.,  giving  his  estimate  of  the  "actual 
cash  value"  of  the  stock,  which  must  not  be  lower  than  the 
average  selling  price  during  the  year.  The  comptroller  need 
not  accept  this  estimate  as  final,  but  may  require  additional 
information  or  may  reappraise  the  stock,  drawing  his  own 
conclusions  from  the  information  of  the  reports,  or  using 
other  information  at  his  discretion.  People  ex  rel  Schwarz- 
child  &  Sulzberger  v.  Roberts,  n  App.  Div.  449,  Affd.  156  N. 
Y.  690  (1898).  If  dissatisfied  the  company  may  review  such 
action  on  certiorari  proceedings.  Where  no  sales  have  been 


STATE  TAXATION.  145 

made  the  question  of  valuation  is  sometimes  difficult,  but  it 
is  one  of  fact  to  be  determined  by  the  officers  of  the  company 
and  the  state  officials,  subject  to  review  by  the  courts. 

The  following  is  the  rule  of  assessment  in  such  cases  as 
stated  in  a  recent  decision  of  the  Court  of  Appeals :  "We 
think  that  the  statute  practically  defines  the  manner  of  deter- 
mining the  basis  for  the  tax  in  this  case.  It  in  effect  declares 
that  the  capital  stock  shall  be  appraised  at  its  actual  value  in 
cash,  and  that  is  made  the  basis  upon  which  the  tax  is  to  be 
assessed.  We  are  of  the  opinion  that  the  actual  value  of  the 
capital  stock  of  such  a  corporation  is  the  value  of  its  assets 
after  deducting  its  liabilities  and  adding  to  the  sum  then  re- 
maining the  value  of  the  good  will  of  the  business  including 
its  right  to  conduct  it  under  its  franchise."  People  ex  rel 
Wiebusch  v.  Roberts,  154  N.  Y.  101,  108  (1897),  Per 
Martin,  J. 

§  149.     Corporations  Exempt  from  Franchise  Tax. 

The  following  domestic  and  foreign  business  corpora- 
tions are  exempt  from  franchise  tax  if  not  less  than  forty  per 
cent,  of  their  capital  is  employed  in  the  state: 

1 i )  Laundry  corporations. 

(2)  Manufacturing  companies  to  extent  of  capital 
employed  in  state  in  manufacturing  and  sale  of  the  pro- 
duct. 

(3)  Mining  companies  wholly  engaged  in  mining 
within  the  state. 

A  special  statement  must  be  made  to  the  state  comptroller 
to  secure  this  exemption.  (Tax  Law,  §  183.)  (See  Form 
48.) 

§  150.     What  Are  Manufacturing  Companies  ? 

The  question  as  to  what  constitutes  "manufacturing" 
to  entitle  a  corporation  to  exemption  from  taxation  under  the 


146  NEW    YORK    CORPORATIONS. 

above  rule  has  been  the  subject  of  much  judicial  interpretation, 
although,  unfortunately,  the  cases  have,  for  the  most  part, 
confined  themselves  to  a  discussion  of  the  particular  instance 
under  review  rather  than  attempting  to  lay  down  any  general 
rules. 

"Whoever  creates  a  useful  thing  by  mechanical  labor  is 
entitled  to  be  called  a  manufacturer"  was  the  test  applied  in 
a  recent  case  (People  ex  rel  Waterman  v.  Morgan,  48  App. 
Div.  395,  399  [1900]),  which  seems  to  cover  the  majority 
of  the  cases.  If  a  corporation  is  in  doubt,  a  letter  to  the  state 
comptroller  will  give  an  official,  though  not  necessarily,  a  final 
ruling  on  the  question.  A  discussion  of  the  cases  in  point 
would  occupy  more  space  than  it  is  possible  to  devote  to  the 
subject  in  this  work.  The  following  are  representative : 
People  ex  rel  Asphalt  Co.  v.  Morgan,  61  App.  Div.  373 
(1901);  People  ex  rel  Devoe  v.  Roberts,  51-  App.  Div.  77 
(1900)  ;  People  ex  rel  Jewelers'  Circular  Pub.  Co.  v.  Roberts, 
155  N.  Y.  i  (1898)  ;  People  ex  rel  U.  P.  Tea  Co.  v.  Roberts, 
145  N.  Y.  375  (1895).  (See  Chapter  XVI  for  report  to  be 
made  comptroller  and  Forms  45,  46,  47  and  48  for  Franchise 
Tax  Reports.) 

§  151.     Stock  Transfer  Tax. 

A  tax  of  two  cents  on  each  $100  face  value  or  fraction 
thereof  is  imposed  "on  all  sales  or  agreements  to  sell,  or 
memoranda  of  sales  or  deliveries  or  transfers  of  shares  or 
certificates  of  stock  in  any  domestic  or  foreign  association, 
company  or  corporation"  made  after  June  ist,  1905.  Stock 
hypothecated  but  not  sold  is  not  taxed. 

Payment  of  this  tax  is  indicated  by  an  adhesive  stamp, 
affixed  to  the  certificate  or  other  evidence  of  transfer,  or 
placed  upon  the  books  of  the  company  if  the  sale  or  transfer 
is  made  only  on  the  books.  The  person  affixing  any  such 
stamp  must  write  or  stamp  thereon  the  initials  of  his  name 


STATE  TAXATION.  147 

and  the  date  of  affixing,  and  cut  or  perforate  the  same  in  a 
substantial  manner  so  that  it  can  not  be  again  used.  No  trans- 
fer of  stock  upon  which  such  tax  is  not  paid  at  the  time  of 
transfer  shall  be  made  the  basis  of  any  action  or  legal  pro- 
ceeding, nor  shall  proof  thereof  be  offered  or  received  in  evi- 
dence in  any  court  of  the  state.  (L.  1905,  Ch.  241.)  Failure 
to  pay  this  tax,  or  to  cancel  stamps  when  affixed,  is  a  mis- 
demeanor, punishable  by  fine  and  imprisonment,  also  by 
additional  civil  penalty  of  $500  for  each  violation. 

The  state  comptroller  holds  that  this  tax  must  be  paid 
on  original  issue.  This  point  has  not  yet  been  judicially 
decided.  As  tax  laws  are  strictly  construed  and  the  original 
issue  of  stock  is  a  receipt  for  value  received  rather  than  a 
transfer  (Burr  v.  Wilcox,  22  N.  Y.  551,  555  (1860),  it  is  at 
least  doubtful  whether  the  tax  is  due  on  an  original  issue. 

§  152.     Stock  Transfer  Tax.     Rules   of  the   State    Comp- 
troller's Office. 

The  following  circular  has  been  issued  by  the  state  comp- 
troller, giving  the  essential  features  of  the  transfer  tax  law 
and  the  rules  of  the  comptroller's  office  in  regard  thereto. 

STATE  COMPTROLLER'S  OFFICE. 


Taxes  on  Stock  Transfers. 


Chapter  241,  laws  of  1905,  went  into  operation  June  2 
following  its  enactment.  Pursuant  to  the  statute,  and  under 
decisions  made  by  this  department  in  administering  the  law, 
the  following  regulations  will  govern  the  imposition  and  col- 
lection of  taxes  upon  transfers  of  stock: 

1.  A  tax  is  imposed  on  all  sales,  agreements  to  sell, 
deliveries,  qr  transfers,  of  shares  or  certificates  of  stock  in  any 
domestic  or  foreign  association,  company  or  corporation. 

2.  The  unit  upon  which  a  tax  is  imposed  is  one  share 
of  stock,  and  the  minimum  tax  is  two  cents  thereon. 


148  NEW    YORK    CORPORATIONS. 

3.  Every  share  of  the  face  value  of  one  hundred  dollars 
or  less  is  taxable  in  the  sum  of  two  cents. 

4.  Where  the  par  value  of  one  share  exceeds  one  hun- 
dred dollars,  an  additional  tax  of  two  cents  is  required  for 
each  additional  one  hundred  dollars  of  par  value  or  fraction 
thereof. 

5.  Where  the  evidence  of  transfer  is  shown  only  by  the 
books  of  the  company,  the  tax  stamp  must  be  placed  upon  such 
books ;  where  the  transfer  is  by  a  certificate  of  stock  delivered 
to  a  person  named  thereon  as  assignee,  the  stamp  must  be 
placed  upon  such  certificate;  where  the  tax  is  upon  an  agree- 
ment to  sell  stock,  or  where  the  transfer  is  by  delivery  of  the 
certificate  assigned  in  blank,  there  must  be  a  delivery  by  the 
seller  to  the  buyer  of  a  bill  or  memorandum  of  sale  to  which 
the  stamp  must  be  affixed. 

6.  Any  transfer  of  stock  of  which  a  record  is  kept  or 
which  should  be  entered  in  books  within  this  state,  or  a  memo- 
randum of  sale  or  agreement  therefor  delivered  between  the 
parties  here,  is  subject  to  a  tax.    The  residence  of  the  parties 
to  the  transaction  is  immaterial,  as  is  also  the  place  where  the 
negotiations  occurred  which  culminated  in  a  sale. 

7.  Every  bill  or  memorandum  of  sale,  agreement  to  sell, 
or  sale  ticket,  executed,  must  show  the  date  thereof,  name  of 
the  seller,  amount  of  sale,  and  the  matter  or  thing  to  which 
it  refers. 

8.  Every  stamp  used  to  denote  payment  of  the  tax  must 
be  cancelled  by  the  user  by  writing  or  stamping  thereupon 
the  initials  of  his  name  and  the  date  of  the  transaction,  and  he 
must  also  cut  or  perforate  the  stamp  in  a  substantial  manner 
so  that  such  stamp  can  not  be  again  used.    An  effective  mark- 
ing with  ink  and  obliterating  of  every  stamp  is  strictly  re- 
quired. 

9.  The  original  issue  of  stock  by  a  corporation  is  tax- 
able. 

10.  A  transfer  made  prior  to  the  second  day  of  June, 
1905,  is  not  taxable. 

11.  The  tax  is  imposed  upon  transfers  of  shares  or  cer- 
tificates of  stock  whether  the  transfer  as  between  the  parties 
thereto  is  for  a  valuable  consideration  or  not. 

12.  A  sale  of  stock  made  outside  of  New  York  State  is 


STATE  TAXATION.  149 

subject  to  a  tax  if  it  is  evidenced  by  entries  in  transfer  books 
or  by  any  form  of  written  instrument  within  the  state  neces- 
sary to  effect  such  transfer. 

13.  A  transfer  of  stock  in  a  building  and  loan  associa- 
tion is  within  the  provisions  of  the  law.    A  surrender  of  shares 
to  such  a  corporation  for  cancellation  upon  maturity  is  not  a 
taxable  transfer.     Shares  transferred  are  taxed  upon  par  or 
face  value  in  the  sum  of  two  cents  each  without  regard  to 
whether  the  share  is  partially  paid  in  or  not. 

14.  The  surrender  of  a  certificate  of  stock  to  a  corpora- 
tion for  the  purpose  of  receiving  other  certificates  to  be  issued 
to  the  same  owner  in  smaller  amounts,  but  in  an  aggregate 
equal  to  the  amount  of  the  surrendered  certificate,  being  a 
mere  exchange  of  certificates  without  a  transfer  of  ownership, 
is  not  taxable. 

15.  A  certificate  when  divided  and  re-issued,  part  to  a 
new  stockholder  and  part  to  the  original  owner,  is  taxable  to 
the  extent  of  the  transfer  to  the  new  purchaser  and  not  taxable 
in  the  portion  retained  by  the  original  owner. 

1 6.  The  law  does  not  make  an  exemption  from  the  tax 
of  shares  of  stock  in  religious  or  charitable  associations. 

17.  Stock  held  by  a  corporation  as  treasury  stock  is  not 
taxable  until  shares  are  issued  and  transferred  to  a  stockholder. 

1 8.  Shares  of  stock  held  by  an  executor  or  adminis- 
trator and  transferred  by  him  to  other  parties,  whether  heirs 
or  not,  are  subject  to  a  tax. 


CHAPTER  XV. 
LOCAL  TAXATION. 


§  153.     Tax  District. 

Any  political  subdivision  of  the  state,  as  a  county,  town, 
incorporated  village  or  city,  which  has  an  independent  local 
board  of  assessors  authorized  to  assess  property  therein  for 
state  and  county  taxes,  is  a  "tax  district."  (Tax  Law,  §  2.) 

§  154.     Taxation  of  Realty. 

The  real  property  of  corporations  is  assessed  in  the  tax 
district  where  it  is  situated  in  the  same  manner  as  the  real 
property  of  individuals.  (Tax  Law,  §  n.) 

§  155.     Taxation  of  Personalty. 

The  entire  capital  or  property  of  a  domestic  corporation 
is  taxable  as  personalty  after  the  following  deductions  have 
been  made:  (See  §§  158-169.) 

(1)  All  real  estate  at  its  assessed  valuation. 

(2)  All  debts  and  liabilities. 

(3)  All  shares  of  stock  actually  owned  by  such 
company  in  other  corporations  taxable  upon  their  capital 
in  New  York. 

(4)  Any  surplus  or  reserve  up  to  ten  per  cent,  of 
the  authorized  capital. 

(5)  Shares  of  the  company's   stock  held   by  the 
state  or  by  incorporated  charitable  or  religious  institu- 
tions.    (Tax  Law,  §§  12,  31.) 


LOCAL  TAXATION.  151 

(6)  All  tangible  property  having  a  permanent  situs 
outside  the  state. 

(7)  United  States  securities. 

(8)  United  States  patents  and  copyrights. 

(9)  Imported  goods  kept  in  the  original  packages. 

(10)  Good  will. 

( 1 1 )  Mortgages  paying  tax  under  Mortgage  Tax 
Law. 

§  156.     Place  of  Assessment  of  Personalty. 

The  place  where  the  personal  tax  of  a  corporation  must 
be  paid  is  fixed  without  regard  to  the  actual  situs  of  the 
personal  property  upon  which  the  taxes  are  paid  (Gas  Co.  v. 
Assessors  of  Olean,  15  St.  Rep.  461,  464  [1888]),  and  is  as 
follows : 

(a)  If  the  corporation  has  a  principal  office  within  the 
state  the  tax  is  payable  in  the  tax  district  where  such  office 
is  situated.     (Tax  Law,  §  n.)     In  determining  which  office 
is  the  "principal"  office  when  the  corporation  has  more  than 
one  office  in  New  York,  the  statement  made  in  the  certificate 
of  incorporation  is  conclusive,  both  upon  the  corporation  and 
the  assessors,  if  the  company  was  required  by  law  to  include 
such  statement  in  its  certificate.     (B.  C.  L.,  §  2.)     Western 
Transit  Co.  v.  Scheu,  19  N.  Y.  408  (1859) ;  Union  Steamboat 
Co.  v.  Buffalo,  82  N.  Y.  351,  356  (1880). 

(b)  If  it  has  no  principal  office  in  the  state,  the  tax 
is  payable  in  the  district  where  the  company  maintains  a  place 
for  the  transaction   of   its  financial  concerns.      (Tax   Law, 
§  n.)     Since  business  corporations  are  required  to  name  their 
principal  office  in  the  certificate  of  incorporation,  this  provi- 
sion does  not  apply  to  them. 

(c)  If  any  corporation  has  neither  a  principal  office  nor 
a  place  for  transacting  its  financial  affairs  within  the  state, 
such  corporation  is  assessed  in  the  tax  district  where  its  opera- 
tions are  actually  carried  on.     (Tax  Law,  §  n.) 


152  NEW    YORK    CORPORATIONS. 

§  157.     Manner  of  Assessing  Personalty. 

The  tax  on  personalty  is  based  upon  the  actual  value  of 
the  property  owned  by  the  corporation  after  the  deductions 
required  or  permitted  by  law  have  been  made.  The  assessors 
may  determine  this  assessment  value  of  the  corporate  per- 
sonalty by  any  method  likely  to  give  the  most  accurate  results. 
They  may  consider  the  market  value  of  the  stock  where  the 
value  of  the  assets  cannot  be  definitely  ascertained.  Brewing 
Co.  v.  Neff,  19  App.  Div.  596  (1897) ;  People  ex  rel  U.  T. 
Co.  v.  Coleman,  126  N.  Y.  433  (1891).  The  payment 
of  dividends  justifies  the  assumption  that  the  capital  stock  is 
unimpaired  and  that  the  assets  are  therefore  at  least  equal  to 
the  amount  of  the  authorized  or  outstanding  capital  stock, 
but  the  presumption  is  rebuttable.  People  ex  rel  M.  R.  Co. 
v.  Barker,  146  N.  Y.  304,  313  (1895). 

Although  corporations  report  to  the  assessors  (see  Chap. 
XVI,  "Reports"),  the  statements  of  such  reports  are  not  bind- 
ing upon  the  latter  if  they  have  other  evidence.  People  ex 
rel  Trust  Co.  v.  Coleman,  126  N.  Y.  433,  448  (1891).  If, 
however,  the  company's  verified  statement  is  uncontradicted,  it 
must  be  accepted.  The  action  of  the  assessors  in  disregarding 
the  report  in  such  a  case  is  reviewable  on  certiorari  proceed- 
ings. People  ex  rel  Edison  Co.  v.  Barker,  139  N.  Y.  55 

(1893). 

§  158.     Deductions  before  Assessment  of  Personalty. 

In  interpreting  the  provisions  of  the  Tax  Law  concern- 
ing the  assessment  of  corporate  personalty,  it  should  be  borne 
in  mind  that  while  the  purpose  of  the  law  is  to  reach  all  prop- 
erty within  the  state  that  may  be  legally  taxed,  double  and 
improper  taxation  is  sought  to  be  avoided  by  deduction,  before 
the  assessment,  of  all  property  subject  to  taxation  as  realty,  of 
all  property  exempt  from  taxation  and  of  all  legitimate  liabili- 
ties. These  deductions  are  as  follows: 


LOCAL  TAXATION.  153 

§  159.     (i)  Real  Estate. 

The  assessed  value  of  any  realty  owned  by  the  corpora- 
tion is  to  be  deducted  from  its  total  assets  before  assessment 
of  personalty.  In  determining  the  personalty  of  the  corpora- 
tion, however,  the  gross  assets  are  first  computed  and  any  real 
estate  is  included  at  its  actual  value.  Then,  since  this  realty 
is  taxed  only  on  its  value  as  fixed  by  the  assessors,  its  assessed 
value  is  deducted  from  the  gross  assets. 

In  theory  the  actual  and  assessed  values  of  realty  should 
be  the  same;  but,  in  practice,  a  difference  is  so  nearly  univer- 
sal that  the  assessors  in  making  up  the  gross  assets  for  the 
personalty  tax,  may  disregard  the  assessed  value,  except  for 
purposes  of  deduction,  and  list  the  realty  at  their  estimate  of 
its  true  value.  People  ex  rel  Gas  Co.  v.  Barker,  144  N.  Y. 
94,  100  (1894).  Under  these  conditions,  it  may  happen  that 
a  corporation  which  has  no  property  except  realty  may  still 
have  to  pay  a  personal  tax,  the  excess  of  the  actual  over  the 
assessed  value  of  its  realty  being  considered  personalty.  Peo- 
ple ex  rel  Clearing  House  v.  Barker,  31  App.  Div.  315  (1898). 

Where  there  are  different  interests  in  the  same  property, 
the  general  rule  still  applies.  For  example,  if  a  corporation 
owns  buildings  on  leased  ground;  since  the  company  pays 
taxes  only  on  the  assessed  value  of  the  buildings,  that  alone 
may  be  deducted.  People  ex  rel  Eden  Musee  Co.  v.  Feitner, 
60  App.  Div.  282  (1901).  Where  corporate  realty  is  mort- 
gaged and  the  equity  of  redemption  only  is  included  in  its 
report  of  assets,  deduction  may  be  made  of  the  assessed  valu- 
ation of  the  equity  only  and  not  of  the  whole  property.  Peo- 
ple ex  rel  Weber  v.  Wells,  180  N.  Y.  62  (1904). 

Real  estate  situated  outside  the  state  is  non-taxable  in 
New  York.  Matter  of  Swift,  137  N.  Y.  77,  84  (1893).  If 
such  real  estate  has  been  assessed  by  the  foreign  jurisdiction, 
the  local  assessors  are  justified  in  assuming  that  the  assessed 


154  NEW    YORK    CORPORATIONS. 

value  is  the  true  value,  and  in  making  their  deductions  ac- 
cordingly. People  ex  rel  Fairchild  Chemical  Co.  v.  Comrs., 
115  N.  Y.  178,  183  (1889).  They  may  in  their  discretion 
consider  other  elements,  such  as  cost,  and  should  do  so  when 
there  is  no  assessed  value  or  where  it  is  not  obtainable.  Ry. 
v.  Comrs.,  95  N.  Y.  554,  562  (1884). 

§  160.     (2)  Debts  and  Liabilities. 

The  Court  of  Appeals  has  interpreted  the  statutory  state- 
ment that  in  fixing  the  assessment  value  of  personalty  the 
stock — or  capital — subject  to  taxation  shall,  after  specified 
deductions,  "be  assessed  at  its  actual  value"  (Tax  Law,  §  12) 
in  the  lighj;  of  §§  31  and  37  of  the  Tax  Law  and  of  the  pro- 
visions of  the  Statutory  Construction  Law,  as  allowing  a  de- 
duction of  corporate  debts;  "for  the  actual  value  of  the  stock 
ordinarily  means  the  value  after  the  debts  are  paid."  People 
ex  rel  Cornell  S.  Co.  v.  Dederick,  161  N.  Y.  195,  206  (1900). 
The  debts  of  the  corporation  are,  therefore,  deducted  before 
the  assessment  of  personalty  is  fixed.  Debts  that  have  been 
contracted  in  the  purchase  of  non-taxable  property,  such  as 
United  States  bonds,  goods  imported  and  held  in  the  original 
packages,  good  will,  etc.,  are  an  exception  to  the  rule  and  are 
not  deductible.  (Tax  Law,  §  6.)  The  property  they  repre- 
sent is  itself  deducted  and  to  allow  for  amounts  due  on  such 
property,  would  be  a  double  deduction.  People  ex  rel  Cornell 
S.  Co.  v.  Dederick,  supra.  Debts  to  be  deductible  must  be 
certain  in  amount  and  not  contingent.  People  ex  rel  Sands  v. 
Feitner,  173  N.  Y.  647  (1903). 

Dividends  actually  declared  in  good  faith  before  assess- 
ment day,  although  not  paid  till  afterward,  may  be  deducted, 
since  they  belong  to  stockholders.  (See  §88.)  People  ex 
tel  Trust  Co.  v.  Barker,  86  Hun  131  (1895).  One  anoma- 
lous New  York  decision  exists  to  the  effect  that  dividends 
declared  but  left  in  the  business  may  be  taxed  as  capital.  The 


LOCAL  TAXATION.  155 

conclusion  is  illogical  and  not  supported  by  authority.  People 
ex  rel  Hawley  Box  Co.  v.  Barker,  23  App.  Div.  532  (1897). 
Interest  due  on  mortgage  and  other  debts  may  be  deducted 
though  not  payable  till  later. 

§  161.     (3)  Shares  of  Stock. 

If  the  company  owns  stock  in  other  corporations  which 
are  taxable  upon  their  capital  stock  under  the  New  York  laws, 
such  stock  is  to  be  deducted.  (Tax  Law,  §  4,  sub.  16.) 
This  is  one  of  the  provisions  intended  to  prevent  double  tax- 
ation. 

§  162.     (4)  Surplus  or  Reserve. 

If  the  corporate  assets  exceed  the  capitalization,  the  sur- 
plus or  reserve,  up  to  ten  per  centum  of  the  authorized  capital, 
may  be  deducted.  People  ex  rel  Citizens'  111.  Co.  v.  Neff, 
26  App.  Div.  542  (1898).  Any  surplus  in  excess  of  this 
amount  is  taxable.  The  fact  that  the  company  has  issued 
interest  bearing  certificates  to  stockholders  showing  their  pro- 
portionate shares  in  the  surplus  does  not  affect  its  status  for 
purposes  of  taxation.  People  ex  rel  W.  Gas  Lt.  Co.  v.  As- 
sessors, 1 6  Hun  196,  199  (1878). 

§  l63-     (5)  Stock  Held  by  State,  etc. 

Shares  of  the  corporation  held  by  the  state,  or  by  incor- 
porated charitable  or  religious  institutions  may  be  deducted. 
(Tax  Law,  §§  12,  31.) 

§  164.     (6)  Property  in  Other  States. 

All  tangible  property  having  a  permanent  situs  outside 
the  state  may  be  deducted.  (See  Matter  of  Swift,  137  N. 
Y.  77,  84  [1893],  for  an  excellent  discussion  of  this  rule.) 
Property  temporarily  in  another  state,  or  removed  to  another 
state  simply  for  the  purpose  of  avoiding  taxation,  is  taxable 


156  NEW    YORK    CORPORATIONS. 

in  New  York.    People  ex  rel  P.  M.  S.  Co.  v.  Comr.  of  Taxes, 
64  N.  Y.  541  (1876). 

Since  "personal  property"  includes  debts  due  from  sol- 
vent debtors  (Tax  Law,  §  2,  subdiv.  4),  such  amounts  are 
taxable  whether  the  debtor  resides  in  New  York  or  elsewhere. 
Bank  deposits  are  debts  due  the  depositor  (Cragie  v.  Hadley, 
99  N.  Y.  131,  133  [1885]),  and  therefore  taxable  under  this 
rule  without  regard  to  the  place  of  deposit.  People  ex  rei 
U.  V.  Copper  Co.  v.  Feitner,  54  App.  Div.  217  (1900). 

§  J65«     (7)  United  States  Securities. 

United  States  securities  owned  by  the  corporation  are 
exempt  from  taxation  and  are  to  be  deducted.  The  exemp- 
tion is  not  limited  to  the  par  value  of  the  bonds  but  to  their 
entire  actual  value.  People  ex  rel  Leonard  v.  Comrs.,  90- 
N.  Y.  63  (1882). 

§  166.     (8)  Patents  and  Copyrights. 

United  States  patents  and  copyrights  are  exempt  from 
state  and  local  taxation.  Ex  rel  Edison  Co.  v.  Assrs.,  156 
N.  Y.  417  (1898);  People  ex  rel  Johnson  v.  Roberts,  159 
N.  Y.  70  (1899) ;  cf.  People  ex  rel  U.  S.  A.  P.  Co.  v.  Knight, 
174  N.  Y.  475  (1903).  Their  value  cannot  therefore  be  in- 
cluded in  the  assessed  value  of  personalty. 

§  167.     (9)  Imported  Goods. 

Goods  imported  and  held  in  the  original  packages  cannot 
be  taxed,  for  it  would  be  state  interference  with  interstate 
commerce,  a  subject  exclusively  under  Federal  control.  Peo- 
ple ex  rel  Bijur  v.  Barker,  155  N.  Y.  330  (1898) ;  People  ex 
rel  Matheson  &  Co.  v.  Roberts,  158  N.  Y.  162  (1899)  ;  Brown 
v.  Maryland,  12  Wheat  419  (1837). 


LOCAL  TAXATION.  157 

§  168.     (10)  Good  Will. 

Good  will  is  not  within  the  definition  of  personal  property 
and  is  not  taxable  for  local  purposes.  People  ex  rel  Brokaw 
Bros.  v.  Feitner,  44  App.  Div.  278  (1899). 

§  169.     (n)  Mortgages. 

Mortgages  on  real  property  within  the  state,  recorded 
after  July  I,  1905,  upon  which  the  mortgage  tax  of  one-half 
of  one  per  cent,  has  been  paid  (L.  1905,  Ch.  729,  §  292), 
are  exempt  from  local  taxation. 

§  170.     Date  of  Assessment. 

The  date  of  assessment  for  both  realty  and  personalty  is 
the  same  in  any  one  tax  district,  but  in  each  tax  district  this 
assessment  date  is  fixed  without  necessary  reference  to  the 
assessment  dates  of  other  districts.  In  the  great  majority  of 
districts  the  assessment  date  is  July  ist,  but  many  of  the  cities 
have  other  dates  fixed  by  charter  provision.  In  New  York 
City,  the  five  boroughs  of  which  constitute  one  tax  district, 
the  assessment  date  is  the  second  Monday  in  January. 

Assessments  become  a  legal  obligation  on  the  date  upon 
which  made,  e.  g.,  the  second  Monday  in  January  in  New  York 
City.  A  corporation  which  changes  the  location  of  its  princi- 
pal office  from  a  tax  district  prior  to  the  date  of  making  assess- 
ments is  not  taxable  in  the  district  from  which  it  removed. 
Mygatt  v.  Washburn,  15  N.  Y.  316  (1857)  ;  City  of  N.  Y. 
v.  McLean,  170  N.  Y.  374  (1902).  Removal  after  assess- 
ment does  not  relieve  the  company  from  payment  of  the  tax. 
(See  Chap.  XVI,  "Reports";  also  Forms  49a-d.) 

§  171.     New  York  City. 

Tax  lists  are  made  up  in  New  York  City  on  the  second 
Monday  in  January.  On  or  about  that  date  the  department 


158  NEW    YORK    CORPORATIONS. 

of  taxes  sends  notices  to  corporations  taxable  in  the  city, 
stating  the  amount  of  the  assessment,  which  is  usually  the 
whole  capitalization  of  the  corporation.  Blanks  for  the  pur- 
pose of  revision  are  also  enclosed.  (See  Form  49)0.)  If  the 
notice  is  not  received  it  should  be  sent  for,  as  the  department 
is  under  no  obligation  to  give  notice  of  the  assessment.  The 
tax  lists  are  open  for  correction  at  the  main  office  of  the  tax 
department  in  the  Borough  of  Manhattan  till,  but  not  includ- 
ing, April  ist,  and  if  any  revision  of  the  assessment  is  de- 
sired, application  therefor  must  be  made  before  that  date. 
Clarke  v.  Mayor,  in  N.  Y.  621  (1889). 

Where  no  application  is  made  for  reduction,  the  assess- 
ment becomes  final  on  April  ist.  If  application  is  made,  the 
commissioners  of  taxes  and  assessments  may  during  April  and 
May  examine  the  officers  of  the  applicant  corporation  under 
oath  and  readjust  the  assessments  as  they  deem  proper.  (Gr. 
N.  Y.  Charter,  §  895.)  Their  determination,  in  that  case, 
becomes  final  on  June  ist  (People  ex  rel  Brewing  Co.  v. 
Feitner,  41  App.  Div.  496  [1899]),  and  is  then  reviewable 
only  on  certiorari  proceedings  which  must  be  commenced 
prior  to  November  ist.  (Gr.  N.  Y.  Charter,  §  906.) 

Taxes  are  payable  on  the  first  Monday  in  October.  If 
paid  prior  to  November  ist  a  rebate  of  six  per  cent,  is  allowed 
from  date  of  payment  to  December  ist.  (Gr.  N.  Y.  Charter, 
§  915.)  If  not  paid  by  December  ist,  one  per  cent,  is  added 
to  the  amount.  If  not  paid  by  January  ist,  interest  is  charged 
at  the  rate  of  seven  per  cent,  per  annum  from  the  first  Monday 
in  October  to  date  of  payment.  (Id.)  If  not  paid  by  January 
1 5th  the  comptroller  may  issue  a  warrant  to  the  city  marshal 
to  collect  the  tax  by  distress  and  sale.  At  any  time  within 
a  year  after  the  return  of  this  warrant  unsatisfied,  the  city 
may  sue  to  collect  in  an  action  brought  by  the  receiver  of 
taxes.  (Gr.  N.  Y.  Charter,  §  232;  L.  1904,  Ch.  624.) 


LOCAL  TAXATION.  159 

§  172.     Special  Franchises. 

"Special  franchises"  are  those  involving  the  use  of  pub- 
lic streets  or  other  public  places  by  private  individuals  or  com- 
panies. They  are  taxable  for  local  purposes.  A  consideration 
of  the  subject  is  outside  the  scope  of  the  present  work. 


CHAPTER  XVI. 
REPORTS. 


§  173.     Required  Reports. 

The  regular  reports  required  annually  of  business  corpo- 
rations are  three  in  number ;  ( i )  a  report  to  the  Secretary  of 
State,  known  as  the  Annual  Report;  (2)  a  report  to  the  state 
comptroller  usually  referred  to  as  the  Comptroller's  Report; 
and  (3)  a  local  tax  report  to  the  assessors  of  the  particular  tax, 
district. 

§  174.     Annual  Report. 

The  annual  report  is  made  to  the  Secretary  of  State  and 
is  supposed  to  show  the  general  financial  condition  of  the  re- 
porting corporation. 

Prior  to  1901  the  responsibility  for  the  annual  report  de- 
volved upon  the  directors  of  corporations  and  was  a  source 
of  considerable  anxiety  and  trouble.  The  liberalizing  amend- 
ments of  that  year,  however,  transferred  the  duty  of  making 
this  report  to  the  executive  officers  of  the  company,  and  prac- 
tically relieved  the  majority  of  corporations  from  the  necessity 
of  making  it  at  all. 

As  the  law  now  stands  corporations  are  required  to  sub- 
mit annually  during  the  month  of  January  to  the  Secretary  of 
State,  a  report  as  of  the  first  day  of  January,  which  shall 
state : 

(i)     The  amount  of  its  capital  stock,  and  the  pro- 
portion actually  issued. 

160 


REPORTS.  l6l 

(2)  The  amount  of  its  debts  or  an  amount  which 
they  do  not  exceed. 

(3)  The  amount  of  its  assets  or  an  amount  which 
its  assets  at  least  equal. 

(4)  The  names  and  addresses  of  all  the  directors 
and  officers  of  the  company  and  in  the  case  of  a  foreign 
corporation,  the  name  also  of  the  person  designated  in 
the  manner  prescribed  by  the  Code  of  Civil  Procedure, 
as  a  person  upon  whom  process  against  the  corporation 
may  be  served  within  this  state. 

"Such  report  shall  be  made  by  the  president  or  a  vice- 
president  or  the  treasurer  or  a  secretary  of  the  corporation 
and  shall  be  filed  in  the  office  of  the  Secretary  of  State.  If 
such  report  be  not  so  made  and  filed,  any  such  officer  who 
shall  thereafter  neglect  or  refuse  to  make  and  to  file  such 
report,  within  ten  days  after  written  request  so  to  do  shall 
have  been  made  by  a  creditor  or  by  a  stockholder  of  the  corpo- 
ration, shall  forfeit  to  the  people  the  sum  of  fifty  dollars  for 
every  day  he  shall  so  neglect  or  refuse."  (S.  C.  L.,  §  30.) 

It  is  manifest  that  a  report  such  as  required  by  the  statute 
just  quoted  may  be  made  absolutely  valueless  as  a  source  of 
information  concerning  the  corporate  condition. 

There  is  no  penalty  for  failure  to  make  the  annual  report 
unless  a  written  demand  as  above  set  forth  has  been  made  for 
its  filing  by  a  creditor  or  stockholder.  Such  demand  is  but 
seldom  made  and  in  practice  the  filing  of  the  annual  report  is 
frequently  neglected.  (See  Form  44.) 

§  175.     Report  to  State  Comptroller.     Franchise  Tax. 

An  annual  report,  for  purposes  of  franchise  taxation, 
must  be  made  to  the  state  comptroller  on  or  before  November 
1 5th  of  each  year,  showing  the  condition  of  the  corporation 
at  the  close  of  the  preceding  October  3ist.  This  report  must 
state  the  amount  of  authorized  capital  stock,  the  amount  of 
stock  paid  in,  the  date  and  rate  per  centum  of  each  dividend 


1 62  NEW    YORK    CORPORATIONS. 

declared  during  the  year,  the  entire  amount  of  the  corporate 
capital  and  the  amount  employed  in  the  state  during  the  year. 
(Tax  Law,  §  189.)  (See  Chap.  XIV,  "State  Taxation.") 

Under  the  power  conferred  upon  him  by  §  191  of  the  Tax 
Law,  the  state  comptroller  has  adopted  forms  which  must  be 
followed  in  making  the  report.  Blanks  may  be  obtained  with- 
out charge  by  applying  therefor  to  the  comptroller's  office  at 
Albany,  New  York.  Forms  are  supplied  for  both  domestic 
and  foreign  corporations ;  also  for  manufacturing,  laundry  and 
mining  companies  making  application  for  exemption  from 
franchise  taxes.  (See  Forms  45  to  48.) 

In  case  of  failure  to  report,  or  if  the  report  is  unsatis- 
factory, the  comptroller  may  estimate  the  dividends  and  the 
value  of  the  capital  stock  from  any  data  obtainable.  He  may 
examine  the  corporate  books  and  records  and  may  institute 
an  investigation  and  take  testimony  in  person  or  by  deputy 
for  his  information.  The  expense  of  such  proceedings  is 
added  to  the  tax.  (Tax  Law,  §  192.)  If  a  report  is  un- 
satisfactory it  is  usual  to  demand  a  supplemental  statement 
before  taking  the  drastic  steps  outlined  above.  (Tax  Law, 

§  I91-) 

For  failure  to  make  the  annual  report  to  the  comptroller, 

or  failure  to  make  any  special  report  required  by  him,  within 
a  reasonable  time  to  be  specified  by  him,  a  penalty  of  one 
hundred  dollars  is  incurred  and  the  additional  sum  of  ten 
dollars  per  day  for  each  day  that  such  failure  continues.  (Tax 
Law,  §  194.) 

§  176.     Local  Tax  Report. 

Local  practice  in  the  matter  of  assessing  corporations  for 
personal  taxes  varies  throughout  the  state.  In  the  majority 
of  tax  districts  the  assessment  of  corporations  is  made  on 
July  1st. 

In  any  such  district  the  president  or  other  executive  offi- 
cer of  every  business  corporation  must  deliver  to  the  local 


REPORTS.  163 

assessors  annually  on  or  before  June  I5th,  and  if  such  tax 
district  is  in  a  county  embracing  a  portion  of  the  forest  pre- 
serve, to  the  state  comptroller  also,  a  verified  report  of  prop- 
erty owned  by  the  corporation,  to  be  used  as  a  basis  for  per- 
sonal taxation.  (See  Form  49a.)  The  assessment  is  made 
en  the  ist  of  July  in  most  of  these  districts  and  is  finally  fixed 
at  a  later  date,  varying  with  the  district. 
This  report  must  state: 

(1)  The  real  property,  if  any,  the  tax  district  in 
which  the  same  is  situated  and  the  sums  actually  paid 
therefor. 

(2)  The  capital  stock  actually  paid  in  and  secured 
to  be  paid  in,  excepting  therefrom  the  sums  paid  for  real 
property  and  the  amount  of  such  capital  stock  held  by 
the  state  and  by  any  incorporated  literary  or  charitable 
institution. 

(3)  The  tax  district  in  which  the  principal  office  of 
the  company  is  situated,  or  in  case  it  has  no  principal 
office,  the  tax  district  in  which  its  operations  are  car- 
ried on.     (Tax  Law,  §  27.) 

The  more  important  tax  districts  provide  regular  printed 
forms  for  this  report.  (See  Forms  4gc  and  49d.) 

If  such  statement  is  not  made  within  twenty  days  after 
June  1 5th,  or  is  insufficient,  evasive  or  defective,  the  assessors 
may  compel  the  corporation  to  make  a  proper  statement  by 
mandamus.  (But  see  Matter  of  Adler  Bros.,  76  App.  Div. 
571,  576  [1902]). 

In  New  York  City  and  Buffalo  no  preliminary  report  is 
required.  The  assessors  fix  the  tax  tentatively  at  an  arbitrary 
amount,  usually  equal  to  the  total  authorized  capitalization. 
It  is  taken  for  granted  that  a  revision  will  be  desired  and 
blank  applications  for  such  revision  are  enclosed  with  the 
notices  of  assessment.  (See  comment,  Chap.  XXIII,  "Forms 
of  Reports.") 


CHAPTER  XVII. 
FOREIGN  CORPORATIONS. 


§  177.     Status  of  Foreign  Corporations. 

The  right  of  the  state  to  impose  conditions  upon  foreign 
corporations  seeking  to  do  business  within  its  boundaries  is 
too  well  settled  to  admit  of  question.  Pembina  Mining  Co.  v. 
Pa.,  125  U.  S.  181  (1887)  ;  People  ex  rel  Oil  Co.  v.  Wemple, 
131  N.  Y.  64  (1892).  A  corporation  is  not  a  "citizen"  within 
the  meaning  of  the  constitutional  provision  that  "the  citizens 
of  each  state  shall  be  entitled  to  all  the  privileges  and  im- 
munities of  citizens  in  the  several  states."  Paul  v.  Va.,  8 
Wall.  168  (1868).  Having  no  absolute  right  of  recognition, 
it  follows  that  a  corporation  doing  business  in  a  state  as  a 
foreign  corporation  must  comply  strictly  with  the  terms  of 
the  statutes  granting  it  the  privilege.  Section  15  of  the  Gen- 
eral Corporation  Law  imposes  upon  a  "foreign  stock  corpora- 
tion other  than  a  monied  corporation  which  shall  do  business 
in  this  state"  the  necessity  of  procuring  a  certificate  of  author- 
ity from  the  Secretary  of  State.  They  are  also  required  to 
pay  certain  prescribed  fees  and  taxes.  (See  §§  181,  182.) 

§  178.     What  Constitutes  "Doing  Business  in  the  State." 

The  phrase  "doing  business  within  the  state"  has  been 
the  subject  of  much  judicial  interpretation  of  no  very  en- 
lightening nature.  Speaking  generally,  a  company  is  "doing 
business  withjn  the  state"  when  it  conducts  and  concludes  in 
New  York  a  series  of  transactions  constituting  a  substantial 
portion  of  its  regular  business.  Occasional  business  trans- 

164 


FOREIGN   CORPORATIONS.  165 

actions  are  not  sufficient  to  require  a  certificate  of  authority, 
but  if  it  continuously  buys  or  sells,  or  does  -both  within  the 
state,  it  is  within  the  provisions  of  the  statutes.  People  v. 
Horn  Silver  Mining  Co.,  105  N.  Y.  76,  83  (1887);  Copper 
Co.  v.  Ferguson,  113  U.  S.  727  (1885),  followed  in  Knitting 
Co.  v.  Bronner,  20  Misc.  125  (1897). 

The  transactions  must  be  completed  within  the  state. 
The  mere  employment  of  traveling  agents  to  take  orders  and 
send  to  the  home  office  for  approval  and  filling  does  not  come 
within  the  purview  of  the  statute,  since  the  contracts  are  made 
outside  the  state.  Jones  v.  Keeler,  40  Misc.  221  (1903); 
People  ex  rel  Cotton  Oil  Co.  v.  Roberts,  25  App.  Div.  13, 
15  (1898).  See  also  Murphy  Varnish  Co.  v.  Connell,  10 
Misc.  553  (1894). 

§  179.     Foreign  Corporations  with  Resident  Incorporators. 

Formerly  in  order  to  escape  the  somewhat  onerous  re- 
quirements then  imposed  on  domestic  corporations,  it  was  not 
uncommon  for  residents  of  New  York  to  incorporate  in 
another  state  and  operate  in  this  state  as  a  foreign  corporation. 
This  practice  has  been  sustained  by  the  courts  (Demarest  v. 
Flack,  128  N.  Y.  205  [1891]  ;  Lancaster  v.  Amsterdam  Co., 
140  N.  Y.  576  [1894]),  but  the  liberalization  of  the  New 
York  corporation  laws  within  recent  years  has  deprived  it  of 
its  desirability.  Outside  incorporation  under  the  present  stat- 
utory provisions  would  merely  result  in  most  cases  in  a  double 
payment  of  fees  and  franchise  taxes. 

§  180.     Procedure  to  Secure  Admission  to  State. 

Before  commencing  operations  a  foreign  corporation  in- 
tending "to  do  business  in  the  state,"  within  the  meaning  of 
that  term  as  explained  above,  must  file  the  following  papers 
with  the  Secretary  of  State  (G.  C.  L.,  §  16;  Code  of  Civ.  Pro., 
§  432)  : 


1 66  NEW    YORK    CORPORATIONS. 

1 i )  A  statement  under  the  corporate  seal  setting  forth  : 

(a)  The  business  or  objects  of  the  corporation  (G.  C. 
L.,  §  16),  which  must  be  such  as  may  lawfully  be  carried  on 
by  domestic  corporations.     (Id.,  §  15.) 

(b)  The  place  within  the  state  which  is  to  be  its  prin- 
cipal place  of  business,  and  the  name  of  the  person  thereat  to 
receive  service  of  process.     If  within  a  city,  the  street  and 
number  should  be  given. 

This  statement  must  be  sworn  to  in  due  form,  usually  by 
the  president  or  acting  head  of  the  company  and  be  impressed 
with  the  corporate  seal.  It  must  be  accompanied  by  the  writ- 
ten consent  of  the  person  designated  to  receive  service  to  act 
for  the  company.  (G.  C.  L.,  §  16;  Code  of  Civ.  Proc.,  §  432.) 
(See  Forms  5oa-c.) 

(2)  There  must  accompany  this  verified  statement  a 
copy  of  the  corporate  charter  or  certificate  of  incorporation  in 
the  English  language,  sworn  to  by  an  executive  officer  of  the 
company.    This  affidavit  may  be  made  outside  the  state  before 
a  New  York  commissioner  of  deeds  or  a  local  notary.     In 
the  latter  case  it  must  be  accompanied  by  a  certificate  showing 
the  notary's  authority.      (For  affidavit,  see  Form  SGC.) 

If  the  papers  are  in  proper  form  and  the  name  of  the 
foreign  corporation  is  not  one  forbidden  to  a  domestic  cor- 
poration of  the  same  character,  or  so  closely  resembling  that 
of  an  existing  domestic  corporation  as  to  cause  confusion,  the 
Secretary  of  State  will  issue  a  certificate  of  authority  to  do 
business.  (G.  C.  L.,  §  15.) 

If  the  resident  agent  of  a  foreign  corporation  is  changed, 
a  revocation  and  new  designation  (see  Form  5ia)  must  be 
filed  with  the  Secretary  of  State.  (Code  of  Civ.  Pro.,  §  432.) 

§  181.     Fees. 

The  fees  for  filing  the  above  papers  and  for  the  certificate 
of  authority  amount  to  $11,  and  this  sum  should  be  sent  with 


FOREIGN   CORPORATIONS.  1 67 

the  papers  direct  to  the  Secretary  of  State.  (Executive  Law, 
§  26,  subdivs.  7,  13.)  No  fee  is  paid  for  filing  revocation 
and  new  designation  when  the  resident  agent  is  changed. 

§  182.     Status   of  Foreign   Corporations  when    Licensed. 

Foreign  corporations  are  governed  primarily  by  the  law 
of  their  domicile,  and  mere  permission  to  do  business  in  New 
York  does  not  enlarge  their  powers  in  any  way.  Bard  v. 
Poole,  12  N.  Y.  495  (1855).  Within  their  chartered  powers, 
however,  they  have,  upon  receiving  the  certificate  of  authority, 
the  same  right  to  transact  business  as  domestic  companies. 
(G.  C.  L.,  §  15.)  Lancaster  v.  Amsterdam  Co.,  140  N.  Y. 
576  (1894).  A  seemingly  unnecessary  provision  of  the  stat- 
utes (G.  C.  L.,  §  17)  specially  grants  to  such  corporations  the 
power  to  hold  real  estate  requisite  for  the  corporate  business 
and  to  convey  the  same  as  fully  as  domestic  corporations. 
Lancaster  v.  Amsterdam  Co.,  supra,  p.  589. 

§  183.     Penalties  for  Non-Compliance. 

Contracts  made  in  New  York  prior  to  obtaining  a  certifi- 
cate of  authority  by  a  foreign  corporation  doing  business  in 
the  state  are  unenforceable  in  the  state  courts,  whether  sued 
upon  by  the  corporation,  by  its  assignee  or  by  those  claiming 
under  either.  (G.  C.  L.,  §  15.) 

The  prohibition  of  the  statute  applies  only  to  actions  on 
contracts.  A  foreign  corporation  may  maintain  a  tort  action, 
as,  for  example,  replevin,  without  obtaining  a  certificate  of 
authority  to  do  business.  American  Type  Founders  Co.  v. 
Conner,  6  Misc.  391,  394  (1894);  Schlitz  Brewing  Co.  v. 
Ester,  86  Hun  22,  27  (1895).  A  foreign  corporation  may 
sue  in  this  state  on  a  contract  made  in  another  state.  Batchel- 
der  Co.  v.  Knopf,  54  App.  Div.  329  (1900).  Such  a  corpora- 
tion may  have  equal  rights  with  residents  under  particular 
statutes.  For  example,  it  has  been  held  that  a  foreign  corpo- 


1 68  .  NEW    YORK    CORPORATIONS. 

ration  may  file  a  mechanic's  lien  against  buildings  containing 
materials  furnished  in  the  state  even  though  it  has  not  obtained 
a  certificate  authorizing  it  to  do  business.  Campbell  v.  Coon, 
149  N.  Y.  556  (1896) ;  Matter  of  Simonds  Furnace  Co.,  30 
Misc.  209  (1900). 

Non-compliance  with  the  statute  is  an  affirmative  defense 
and  must  be  specifically  pleaded  by  one  sued  on  contract  by  a 
foreign  corporation  which  has  not  obtained  the  required  au- 
thorization. Parmele  Co.  v.  Haas,  171  N.  Y.  579  (I9O2).1 
Foreign  corporations  may  take  New  York  real  property  by 
devise,  or  may  purchase  it  on  foreclosure  of  any  mortgage 
held  by  them,  or  may  acquire  it  upon  settlement  to  secure  a 
debt,  without  a  certificate,  and  hold  the  same  for  a  term  not 
exceeding  five  years.  (G.  C.  L.,  §  18.) 

§  184.     Principal  Office. 

Foreign  corporations  must  maintain  a  principal  office  or 
place  of  business  within  the  state.  (G.  C.  L.,  §  16.)  This 
may  be  merely  the  business  office  of  the  resident  agent,  the 
object  of  the  statute  being  attained  when  a  place  is  designated 
where  process  may  be  served  on  the  company.  The  resident 
agent  may  change  his  office  by  filing  with  the  Secretary  of 
State  a  certificate  stating  that  the  change  has  been  made  and 
designating  the  location  of  the  new  office,  which  must  be  with- 
in the  state.  (Code  of  Civ.  Pro.,  §  432.) 

§  185.     State  Taxation.     License  Tax. 

Foreign  corporations  which  have  obtained  authority  to 
transact  business  in  this  state  under  the  provisions  of  the 
General  Corporation  Law  must  pay  a  license  tax  of  one- 
eighth  of  one  per  cent,  on  the  capital  employed  in  New  York 
during  the  first  year  of  business.  If  in  any  year  thereafter 

1  But  see  contra  holding  that  the  defect  may  be  taken  advantage  of 
on  demurrer,  Welsbach  Co.  v.  Norwich  Gas  Co.,  96  App.  Dlv.  52  (1904), 
affd.  180  N.  Y.  533.  See  also  Emmerich  Co.  v.  Sloane,  46  Misc.  513,  516 
(1905). 


FOREIGN   CORPORATIONS.  169 

the  capital  so  employed  is  increased,  a  similar  tax  must  be 
paid  on  the  increase.  (Tax  Law,  §  181.)  This  tax  corre- 
sponds to  the  organization  tax  required  of  domestic  corpora- 
tions (see  Chapter  II),  but  owing  to  its  higher  rate  places 
foreign  corporations  at  a  distinct  disadvantage. 

The  license  tax  must  be  paid  within  thirteen  months  from 
the  date  of  beginning  business  in  New  York  and  unless  a 
receipt  therefor  is  obtained,  the  corporation  cannot  maintain 
an  action  in  the  state  courts.  (Tax  Law,  §  181.)  (For  Re- 
port, see  §  189;  also  Form  47.) 

§  186.     State  Taxation.     Annual  Privilege  Tax. 

Foreign  business  corporations  carrying  on  business  in 
New  York,  unless  engaged  wholly  in  manufacturing,  pay  a 
state  tax  for  the  privilege  corresponding  to  the  franchise  tax 
paid  by  domestic  companies  (see  Chapter  XIV,  "State  Taxa- 
tion") computed  on  the  basis  of  capital  employed  within  the 
state.  (Tax  Law,  §  182.) 

The  taxability  of  foreign  corporations  under  the  section 
depends  therefore  upon  the  concurrence  of  two  conditions. 

1 i )  The  corporation  must  be  doing  business  within  the 
state.     (See  §  178.) 

(2)  Some  portion  of  the  capital  must  be  employed  with- 
in the  state.    People  ex  rel  Chicago  June.  Co.  v.  Roberts,  154 
N.  Y.  i  (1897). 

It  is  not  always  an  easy  matter  to  determine  what  capital 
is  employed  within  the  state  although  the  same  general  rules 
apply  as  in  the  case  of  domestic  companies.  ( See  Chap.  XIV, 
"State  Taxation.")  People  ex  rel  Davis-Colby  Co.  v.  Camp- 
bell, 66  Hun  146,  148  (1892). 

"Capital"  means  actual  tangible  property  and  not  capital 
stock.  People  ex  rel  Seth  Thomas  Clock  Co.  v.  Wemple, 
133  N.  Y.  323  (1892)  ;  People  ex  rel  Ginseng  Co.  v.  Kelsey, 
93  N.  Y.  Supp.  369,  Affd.  182  N.  Y.  526  (1905).  It  is  held, 


170  NEW    YORK    CORPORATIONS. 

however,  that  the  statute  contemplates  the  taxation  of  "capi- 
tal" not  "surplus."  People  ex  rel  Advertising  Co.  v.  Roberts, 
4  App.  Div.  288  (1896),  Affd.  151  N.  Y.  621  (1896).  Under 
this  ruling  a  foreign  corporation  may  employ  its  surplus  in 
this  state  exempt  from  taxation — that  is,  it  cannot  be  taxed 
on  an  amount  greater  than  its  authorized  capital  stock. 

While  in  most  cases  a  foreign  corporation  doing  business 
within  this  state  will  employ  some  portion  of  its  capital  in 
so  doing,  it  is  quite  possible  for  the  business  to  be  of  such 
a  nature  as  not  to  require  the  employment  of  capital.  It  has 
been  held  that  a  foreign  corporation  soliciting  orders  through 
agents  for  transmission  to  an  office  outside  the  state,  is  not 
employing  capital  within  the  state  even  though  it  leases  a 
New  York  office  for  the  purpose  of  showing  samples  and 
deposits  money  in  a  New  York  bank.  People  ex  rel  Smith 
Co.  v.  Roberts,  27  App.  Div.  455  (1898);  People  ex  rel 
Kellogg  v.  Roberts,  30  App.  Div.  150  (1898). 

The  annual  privilege  tax  is  computed  on  the  amount  of 
capital  employed  within  the  state  and  the  rate  is  determined 
primarily  by  the  dividends  declared,  exactly  as  in  the  case  of 
domestic  companies.  No  distinction  is  made  between  divi- 
dends earned  within  or  without  the  state.  The  tax  is  regu- 
lated by  the  dividends  declared,  wherever  earned.  Meat  Co. 
v.  Roberts,  155  N.  Y.  408  (1898).  (See  Chap.  XIV,  "State 
Taxation.") 

§  187.     Local  Taxation. 

Foreign  corporations  are  taxed  for  local  purposes  on 
their  real  estate  and  on  the  capital  employed  within  the  state 
in  the  same  manner  and  under  the  same  rules  as  domestic 
companies.  (Tax  Law,  §  7.)  (See  Chap.  XV,  "Local  Tax- 
ation.") People  ex  rel  Yellow  Pine  Co.  v.-  Barker,  23  App. 
Div.  524,  Affd.  155  N.  Y.  665  (1898).  They  are  entitled  to 
deduct  from  their  capital  the  amount  of  debts  incurred  in  the 


FOREIGN   CORPORATIONS. 

purchase  of  New  York  property  but  not  general  indebtedness. 
People  ex  rel  Hecker  Milling  Co.  v.  Barker,  147  N.  Y.  31 

(1895). 

§  188.     Books  Required  to  be  Kept  by  Foreign  Corpora- 
tions. 

Every  foreign  business  corporation  must  keep  at  its  prin- 
cipal office  in  the  state,  or  at  the  office  of  its  local  transfer 
agent,  a  stock  book  in  the  form  prescribed  for  domestic  com- 
panies. (S.  C.  L.,  §  53.)  (See  §§  135,  136.)  The  stock 
book  must  be  open  daily  during  business  hours  for  the  in- 
spection of  stockholders  and  judgment  creditors  and  state 
officials  authorized  thereto.  (S.  C.  L.,  §  53.)  The  New  York 
courts  have  no  jurisdiction  to  grant  a  writ  of  mandamus 
against  a  foreign  corporation  doing  business  in  this  state  to 
compel  it  to  allow  inspection  of  its  books.  Matter  of  Rap- 
pleye,  43  App.  Div.  84,  Affd.  161  N.  Y.  615  (1899)  ;  Matter 
of  Mitchell  v.  N.  S.  O.  &  T.  Co.,  44  Misc.  514  (1904).  The 
person  entitled  to  inspect  such  books  and  records  must  apply 
to  the  courts  of  the  corporation's  domicile.  As  an  incident 
to  an  action  either  in  law  or  equity,  a  New  York  court  may, 
however,  undoubtedly  compel  the  production  of  the  books  and 
papers  of  a  foreign  corporation,  either  by  subpoena  duces 
tecum  or  authorized  judicial  order.  Matter  of  Rappleye, 
supra. 

For  any  refusal  to  allow  the  prescribed  inspection  of  the 
stock  book,  the  corporation  and  the  officer  or  agent  so  refusing 
shall -each  forfeit  $250  to  the  person  to  whom  such  refusal 
was  made.  (S.  C.  L.,  §  53.) 

§  189.     Reports. 

The  same  reports  are  required  from  foreign  as  from 
domestic  corporations.  (See  Chap.  XVI,  "Reports";  also 
Chap.  XXIII,  "Forms  of  Reports.")  (S.  C.  L.,  §  30;  Tax 


172  NEW    YORK    CORPORATIONS. 

Law,  §  189.)  A  special  report  must  be  made  by  foreign  cor- 
porations at  the  end  of  the  first  year  of  business  in  the  state 
as  a  basis  for  determination  of  the  license  tax.  (See  §  185.) 
This  report  must  be  made  to  the  state  comptroller,  and  is  in 
practically  the  same  form  as  the  annual  report  made  to  the 
comptroller  for  the  purposes  of  the  privilege  tax.  ( See  Form 
47.)  Blanks  may  be  obtained,  without  cost,  by  application 
addressed  to  "State  Comptroller,  Albany,  New  York." 

§  190.     Attachment  Against. 

An  attachment  may  issue  against  the  New  York  prop- 
erty of  a  foreign  corporation  "however  solvent  it  may  be,  and 
however  great  its  ability  to  pay  all  claims  against  it  on  de- 
mand. It  is  not  within  its'  power  to  prevent  a  creditor,  or  a 
fictitious  claimant  even,  from  obtaining  an  attachment." 
Robertson  v.  Ongley  Electric  Co.,  82  Hun  585,  588  (1894). 
(Code  of  Civil  Pro.,  §§  635,  636.) 


PART  II.— FORMS  AND  PRECEDENTS. 
CHAPTER  XVIII. 


ORGANIZATION.     FORMS. 


Farm  i.     Subscription  List. 


•  Subscription  List. 

THE  VERASCOPE  CAMERA  COMPANY. 


To  be  Incorporated  under  the  Laws  of  New  York. 


Capital  Stock $25,000. 

Shares. .          ..$100  each. 


We,  the  undersigned,  hereby  subscribe  for  and  agree  to  take  at 
their  par  value,  the  number  of  shares  of  the  Capital  Stock  of  The  Vera- 
scope  Camera  Company  set  opposite  our  respective  names,  said  sub- 
scriptions to  become  due  and  payable  in  cash  on  demand  of  the 
Treasurer  of  the  Company,  so  soon  as  said  Company  is  organized. 

Troy,  New  York,  March  15,  1906. 


NAMES. 

ADDRESSES. 

SHARES. 

AMOUNT. 

David    B.    Ewbank    .  . 
Henry   Brown    

Troy,  New  York... 
Syracuse,  New  York 

IS 

IO 

$1,500  oo 

I  OOO  OO 

(See  §§  81,  89.) 

This  is  a  simple  and  common  form  of  subscription  list. 
It  is  to  be  noted  that  subscriptions  made  under  it  are  mere 
promises  without  consideration,  and  revocable  at  will  by  the 
subscribers  until  the  organization  of  the  company.  To  avoid 

173 


174  NEW    YORK    CORPORATIONS. 

this  element  of  uncertainty,  subscription  lists  are  sometimes 
drawn  with  a  trustee  acting  for  the  corporatidn,  as  in  the 
following  form,  so  that  subscriptions  are  binding  from  the 
time  they  are  made. 

Form  2.     Subscription  List.      Trustee's. 


Subscription  List. 
HARTFORD  CEMENT  COMPANY. 


To  be  Incorporated  under  the  Laws  of  the  State  of  New  York  for 
the  Manufacture  of  Portland  Cement. 


Capital   Stock,  $500,000.     Shares,  $100  each. 

We,  the  undersigned,  hereby  agree  with  William  M.  Barclay  as 
Trustee  for  the  Hartford  Cement  Company  to  subscribe  for  the  num- 
ber of  shares  of  the  Capital  Stock  of  said  Company  set  opposite  our 
respective  signatures,  and  agree  to  pay  the  par  value  thereof  as 
follows : 

Five  per  cent,  of  subscription  on  demand  to  William  M.  Barclay, 
as  Trustee  for  the  said  Company,  such  payment,  or  so  much  thereof 
as  may  be  necessary,  to  be  used  for  the  preliminary  and  incorporat- 
ing expenses  of  said  Company;  30  per  cent,  of  subscription  to  the 
Treasurer  of  the  Company  ten  days  after  the  incorporation  thereof, 
and  the  remainder  of  subscription  at  such  times  and  in  such  instal- 
ments as  may  be  prescribed  by  the  Board  of  Directors. 

New  York,  January  i8th,  1906. 


NAMES. 

ADDRESSES. 

SHARES. 

AMOUNT. 

Henry  C.  Allen  

170  Broadway,  N.  Y. 

35 

$3,500  oo 

When  subscriptions  are  solicited  widely,  or  from  parties 
at  a  distance,  an  individual  subscription  blank  is  usually  em- 
ployed and  is  mailed  to  the  particular  person  with  such  state- 
ments and  prospectuses  as  may  be  necessary.  A  common 
form  of  individual  blank  follows,  and  in  Form  4  is  given  the 
usual  blank  employed  after  organization. 


ORGANIZATION.      FORMS.  175 

Form  3.     Subscription  Blank.     Individual. 

THE  NEW  ALBANY  RUBBER  COMPANY, 
60  Liberty  St.,  New  York. 


To  be  Incorporated  under  the  Laws  of  New  York. 


Capital  Stock $500,000. 

Shares . .         . . $100  each. 


I  hereby  subscribe  for shares  of  the  Capital  Stock  of 

The  New  Albany  Rubber  Company  at  the  par  value  thereof,  and 
agree  to  pay  50  per  cent,  of  such  subscription  on  demand  of  the 
Treasurer  so  soon  as  .said  Company  is  incorporated;  the  remainder 
to  be  paid  at  such  times  and  in  such  amounts,  not  exceeding  10  per 
cent,  of  said  subscription  in  any  one  month,  as  may  be  prescribed  by 
the  Board  of  Directors. 

Unless  one-half  of  the  capital  stock  of  said  Company  is  reliably 
subscribed  by  the  thirtieth  day  of  June,  1905,  and  the  Company  in- 
corporated within  thirty  days  thereafter,  this  subscription  shall  be 
void  and  of  no  effect. 

Dated  at 


Form  4.     Subscription  Blank.     After  Organization. 

THE  ST.  JOHN  PLACER  MINING  COMPANY, 
6  Wall  St.,  New  York. 


Capital  Stock $1,000,000. 

Shares $10  each. 


Enclosed  find  certified  check  for in  payment  for 

Shares  of  the  full-paid,  non-assessable  stock  of  the  St.  John  Placer 
Mining  Company. 

Dated 1906. 

Issue  Certificate  to 

Street 

City 

State.. 


1/6  NEW    YORK    CORPORATIONS. 

Make  checks  payable  to  order  of  the  Company.  The  right  is 
reserved  to  reject  or  pro  rate  subscriptions.  Give  full  name  of  party 
to  whom  stock  is  to  be  issued. 


In  New  York  any  subscription  after  organization,  pay- 
able in  money,  must  be  accompanied  by  at  least  ten  per  cent, 
of  its  amount.  (See  §  81.) 

Forms,     (a)  Certificate  of  Incorporation.     Usual  Form. 

CERTIFICATE  OF  INCORPORATION 

of 
HALLIMAN  DRUG  COMPANY. 


We,  the  undersigned,  all  being  of  full  age  and  citizens  of  the 
United  States,  and  one  of  us  a  resident  of  the  State  of  New  York, 
for  the  purpose  of  forming  a  corporation  under  the  Business  Cor- 
porations Law  of  the  State  of  New  York,  do  hereby  certify  and 
set  forth : 

First — The  name  of  said  corporation  shall  be 
"HALLIMAN  DRUG  COMPANY." 

Second — The  purposes  for  which  said  corporation  is  to  be  formed 
are  as  follows: 

(a)  To  prepare,  compound,  manufacture,  buy,  sell,  import, 
export  and  generally  deal  in  and  with  drugs,  medicines,  chemicals, 
proprietary  articles,  druggists',  physicians'  and   hospital  supplies 
and    all    kinds    of    pharmaceutical,    chemical    and    medicinal    pre- 
parations and   materials. 

(b)  To  conduct  and  carry  on  in  all  its  branches  the  busi- 
ness  of   chemists,   druggists    and   manufacturers   and    dealers   in 
medical,    chemical,    pharmaceutical    and    other    compounds,    pre- 
parations and  materials  and  in  all  supplies,  devices,  machinery, 
apparatus  and  implements  used  with  or  in  connection  with  such 
business. 

(c)  To  apply  for,  obtain,  purchase  or  otherwise  acquire  and 
to  register,  hold,  own,  use,  sell  or  otherwise  dispose  of  any  and  all 
trade  mark*,  trade  names,  processes,  formulae,  trade  secrets,  in- 
ventions and  devices  of  all  kinds,  whether  secured  under  letters 
patent  of  the  United   States  or  of  any  foreign  country. 

(d)  To  purchase,  lease  or  otherwise  acquire  and  hold  lands, 
buildings,   tenements,   factories   and   real   estate   in   the   State   of 
New  York  and  elsewhere  for  the  plant,  offices,  workshops,  ware- 
houses, laboratories  and  manufactories  of  the  Company  and  to 
lease,  mortgage  and  convey  such  real  estate  in  such  manner  as 
may  appear  for  the  best  interests  of  the  Company. 


ORGANIZATION.      FORMS.  177 

(e)  To  buy,  sell,  import,  prepare,  manufacture  and  generally 
to  deal  in  and  with  all  kinds  of  goods,  wares,  chattels,  merchan- 
dise and  personal  property  and  to  conduct  any  lawful  manufac- 
turing or  mercantile  business  in  connection  therewith. 

(f)  To  carry  on  any  other  business  permissible  under  the 
Business   Corporations    Law   of   the   State   of   New   York   which 
may  be  carried  on  to  advantage  in  connection  with  the  business 
of  the  Company  or  which  may  tend  to  promote  its  interests. 

(g)  To  conduct  its  business  in  other  states  or  foreign  coun- 
tries, and  to  have  one  or  more  offices  out  of  the  state,  and  to 
hold,  purchase,  mortgage  and  convey  real  and  personal  property 
out  of  the  state  but  subject  to  the  laws  of  the  jurisdiction  where 
such  property  is  situated. 

Third — The  amount  of  capital  stock  of  said  Company  shall  be 
Twenty  Thousand  Dollars  ($20,000). 

Fourth — The  number  of  shares  composing  said  capital  stock  shall 
be  Two  Hundred  (200)  Shares  of  the  par  value  of  One  Hundred 
Dollars  ($100)  each,  and  the  amount  of  capital  with  which  said  Com- 
pany will  begin  business  is  Five  Hundred  Dollars  ($500). 

Fifth — The  principal  business  office  of  said  Company  shall  be 
located  in  the  Borough  of  Manhattan,  in  the  City,  County  and  State 
of  New  York. 

Sixth — The  duration  of  said  Company  shall  be  perpetual. 

Seventh — The  number  of  Directors  of  said  Company  shall  be 
three  (3). 

Eighth — The  names  and  post-office  addresses  of  the  Directors  of 
said  Company  for  the  first  year  are  as  follows: 

NAMES.  ADDRESSES. 

Ernest  McVickars   No.  10  Maiden  Lane,  N.  Y.  City. 

Samuel   Halliman    No.  170  Broadway,  N.  Y.  City. 

George  Williams No.  310  W.  79th  St.,  N.  Y.  City. 

Ninth — The  names  and  post-office  addresses  of  the  subscribers  to 
this  certificate  and  the  number  of  shares  of  stock  which  each  agrees  to 
take  in  said  Company  are  as  follows: 

NAMES.  ADDRESSES.  SHARES. 

Ernest  McVickars   No.  10  Maiden  Lane,  New  York  City..  I 

Samuel  Halliman   No.  170  Broadway,  New  York  City I 

George  Williams No.  310  W.  7Qth  St.,  New  York  City. . .  I 

Tenth — At  all  elections  of  Directors  of  this  Corporation,  each 
stockholder  shall  be  entitled  to  as  many  votes  as  shall  equal  the 
number  of  his  shares  of  stock,  multiplied  by  the  number  of  Directors 
to  be  elected,  and  he  may  cast  all  of  such  votes  for  a  single  director 
or  may  distribute  them  among  the  number  to  be  voted  for,  or  any 
two  or  more  of  them  as  he  may  see  fit. 


178  NEW    YORK    CORPORATIONS. 

Eleventh — Pursuant  to  Section  40  of  the  Stock  Corporation  Law, 
as  amended,  this  Corporation  shall  have  power  to  purchase,  acquire, 
hold  and  dispose  of  the  stocks,  bonds  and  other  evidences  of  indebted- 
ness of  any  corporation,  domestic  or  foreign,  and  issue  in  exchange 
therefor  its  stock,  bonds  or  other  obligations. 

In  Witness  Whereof,  we  have  made  and  signed  this  Certifi- 
cate in  duplicate  this  twentieth  day  of  December,  One 
Thousand,  Nine  Hundred  and  Five. 

ERNEST  McViCKARS. 
SAMUEL  HALLIMAN. 
GEORGE  WILLIAMS. 
STATE  OF  NEW  YORK,       ) 
County    of    New    York,  f    ' 

Personally  appeared  before  me  this  twentieth  day  of  December, 
1905,  Ernest  McVickars,  Samuel  Halliman  and  George  Williams,  to 
me  personally  known  to  be  the  individuals  described  in  and  who  exe- 
cuted the  foregoing  certificate,  and  severally  acknowledged  that  they 
executed  the  same  for  the  purposes  therein  set  forth. 

MILTON  NOBLE, 

j       NOTA'RIAL       )  Notary  Public  No.  76, 

j  SEAL.          f  New  York  County,  N.  Y. 


(See  Chap.  Ill;  also  B.  C.  L.,  §  2.) 

The  foregoing  is  the  usual  form  of  New  York  charter. 
It  is  usually  prepared  in  triplicate,  two  copies  for  filing  and 
one  copy  for  the  use  of  the  corporation.  The  extra  copy  if 
intended  for  use  as  legal  evidence  of  the  facts  therein  set 
forth  must  be  certified  by  the  Secretary  of  State.  If  it  is 
merely  for  the  company  files,  as  is  usually  the  case,  certifica- 
tion is  unnecessary.  (For  fees,  see  Table  page  347.) 

The  word  "The"  should  be  omitted  from  the  corporate 
name  unless  it  is  desired  as  part  of  the  legal  title.  Its  inclu- 
sion in  the  name  at  times  involves  very  awkward  verbal  con- 
structions. In  case  of  doubt  as  to  whether  any  particular 
name  will  be  allowed  by  the  state  authorities,  the  matter 
may  be  settled  by  correspondence  with  the  Secretary  of  State. 

The  charter  purposes  may  be  as  comprehensive  as  desired 
so  long  as  they  are  in  accord  with  the  state  laws. 

The  amount  with  which  the  company  will  begin  busi- 
ness may  not  be  less  than  $500  and  the  incorporators'  sub- 
scriptions should  be  at  least  this  amount. 


ORGANIZATION.       FORMS.  179 

The  street  address  of  principal  office  is  not  required,  but 
if  in  New  York  City,  the  Borough  must  be  given. 

Any  desired  number  of  directors  not  less  than  three. may 
be  designated. 

Three  incorporators  are  sufficient  and  though  any  larger 
number  desired  may  participate,  difficulty  in  securing  signa- 
tures and  acknowledgments  is  increased  thereby.  All  the 
incorporators  must  be  subscribers  to  the  stock  of  the  com- 
pany to  the  extent  of  at  least  one  share.  Their  business  ad- 
dresses are  sufficient  for  the  purposes  of  the  charter. 

Form  5.   (b)     Certificate    of    Incorporation.        Extended 
Purposes. 


CERTIFICATE  OF  INCORPORATION 

OF  THE 

HAMILTON  SMELTING  AND  MINING  COMPANY. 


We,  the  undersigned,  all  being  of  full  age  and  two-thirds  being 
citizens  of  the  United  States  and  one  of  us  a  resident  of  the  State  of 
New  York,  for  the  purpose  of  forming  a  corporation  under  the  Business 
Corporations  Law  of  the  State  of  New  York,  do  hereby  certify  and  set 
forth : 

First.    The  name  of  said  corporation  shall  be 

"  Hamilton  Smelting  and  Mining  Company." 

Second.  The  purposes  for  which  said  corporation  is  to  be  formed 
are  as  follows : 

(1)  To  buy,  lease  or  otherwise  acquire  mines,  mining  rights,  quar- 
ries and  mineral  lands  of  every  kind,  nature  and  description  and  to  work, 
mine,  prospect,  develop,  operate  and  promote  the  same ;  to  mine,  quarry 
and  excavate  copper,  gold,  silver  and  other  ores  and  metals  and  minerals 
of  all  kinds  and  descriptions. 

(2)  To   buy,   lease,   construct,   own,   control,   operate   and   maintain 
mills,  works  and  plants  for  the  crushing,  sampling,  milling,  smelting,  re- 
duction  and  concentration   of  minerals   and   metal-bearing  ores   and   the 
extraction  therefrom  of  all  kinds  of  metals  and  mineral  products  and  by- 
products, on  its  own  account  and  as  factor  and  agent  for  others. 

(3)  To  treat,  prepare  and  manufacture  and  to  buy,  sell  and  generally 
to  deal  in  iron,   steel,  manganese,  coke,  copper,   lumber  and   other  ma- 
terials and  in  all  or  any  articles  consisting  of  or  partly  consisting  of  metal, 
wood  or  other  materials  and  any  and  all  products  and  by-products  thereof. 


ISO  NEW    YORK    CORPORATIONS. 

•(4)  To  buy,  sell,  manufacture,  produce  and  dispose  of  all  kinds  of 
goods,  wares,  merchandise,  manufactures,  commodities,  food  stuffs,  drugs, 
furniture,  machinery,  tools,  supplies  and  agricultural  products  and  gen- 
erally to  engage  in  and  carry  on  any  form  of  manufacturing  or  mercan- 
tile enterprise,  necessary  or  incidental  to  the  business  of  the  Company. 

(5)  In  other  states   and  jurisdictions   to  have  one  or  more  offices 
arid  to  carry  on  all  or  any  part  of  its  operations  and  business,  and  un- 
limitedly  and  without  restriction  to  hold,  purchase,  mortgage,  lease  and 
convey  real  and  personal  property  as  allowed  by  the  laws  of  such  states 
and  jurisdictions. 

(6)  To  apply  for,  obtain,  purchase  or  otherwise  acquire  and  to  reg- 
ister, hold,  own,  use,  operate  and  to  sell,  assign  or  otherwise  dispose  of 
any  and  all  trade  marks,  patent  rights,  improvements,  processes,  formulae, 
inventions   and   apparatus   of   all   kinds,    whether   secured    under   letters 
patent  of  the  United   States  or  in  any  foreign  country  or  in  any  other 
manner. 

(7)  To  do  any  of  the  things  hereinbefore  enumerated  for  itself  or 
on 'account  of  others;  to  make  and  perform  contracts  for  the  doing  of 
any  of  said  things ;  to  carry  on  any  business  or  operation  deemed  ad- 
vantageous or  profitable  to  the  corporation  in  connection  with  or  in  furth- 
erance of  any  of  said  things ;  to  acquire,  manage  and  dispose  of  contracts, 
properties  and  rights  of  all  kinds,  including  the  assets,  businesses,  good- 
wills and  liabilities  of  persons,  firms  and  corporations  and  generally  to 
do  anything  that  is  permissible  to  corporations  under  the  Business  Cor- 
porations Law  of  the  State  of  New  York. 

'(8)  For  the  purposes  of  its  business  to  enter  into,  make,  perform 
and  carry  out  contracts  of  every  sort  and  kind,  necessary  or  incidental 
to  the  purposes  of  this  Company,  with  any  person,  firm,  association,  or 
corporation,  whether  private,  public  or  municipal,  or  with  any  body 
politic,  and  with  the  government  of  any  country,  or  with  any  state,  terri- 
tory or  colony  thereof. 

(9)  To  do  any  or  all  of  the  things  set  forth  in  this  certificate  as 
objects,  purposes,  powers  or  otherwise,  to  the  same  extent  and  as  fully 
as  natural  persons  might  or  could  do  and  in  any  part  of  the  world  as 
principals,  agents,  contractors  or  otherwise. 

(10)  To  conduct  any  business  permissible  under  the  Business  Cor- 
porations Law  of  the  State  of  New  York,  which  may  be  carried  on  to 
advantage  in  connection  with  its  business  or  to  its  profit  or  advantage. 

Third.  The  amount  of  capital  stock  of  said  Company  shall  be  One 
Million  Dollars  ($1,000,000). 

Fourth.  The  number  of  shares  composing  said  capital  stock  shall 
be  ten  thousand  (10,000)  shares  of  the  par  value  of  one  hundred  dollars 
($100)  each,  and  the  amount  of  capital  with  which  said  Company  will 
begin  business  is  five  hundred  dollars  ($500). 

Fifth.  The  principal  business  office  of  said  Company  shall  be  located 
in  the  Borough  of  Manhattan  in  the  County,  City  and  State  of  New  York. 

Sixth.    The  duration  of  said  Company  shall  be  perpetual. 

Seventh.    The  number  of  directors  of  said  Company  shall  be  five  (5). 

Eighth.  The  names  and  post-office  addresses  of  the  directors  of  said 
Company  for  the  first  year  are  as  follows : 


ORGANIZATION.      FORMS.  l8l 


NAMES.  ADDRESSES. 

1  heodore  Hamilton  100  Broadway,  New  York  City. 

Howard  McShayne  " 

John  R.  McCullough  " 

Henry  M.  Frenckel  Montclair,  New  Jersey. 

James  McFarrell 356  West  End  Ave.,  New  York  City. 

Ninth.  The  names  and  post-office  addresses  of  the  subscribers  to  this 
certificate  and  the  number  of  shares  of  stock  which  each  agrees  to  take  in 
said  Company  are  as  follows : 

NAMES.  ADDRESSES.  SHARES. 

Theodore  Hamilton  100  Broadway,  New  York  City.        I 

Howard  McShayne  "  I 

John  R.  McCullough  '  i 

Tenth.  Pursuant  to  Section  40  of  the  Stock  Corporation  Law,  as 
amended,  this  Company  shall  have  power  to  purchase,  acquire,  hold  and 
dispose  of  the  stocks,  bonds  and  other  evidences  of  indebtedness  of  any 
corporation,  domestic  or  foreign,  and  issue  in  exchange  therefor,  its  bonds, 
stocks  or  other  obligations. 

In  Witness  Whereof,  we  have  made  and  signed  this  certificate  in 
duplicate,  this  fifth  day  of  January,  one  thousand,  nine  hun- 
dred and  six. 

THEODORE  HAMILTON. 
HOWARD  MCSHAYNE. 
JOHN  R.  MCCULLOUGH. 
(  Acknowledgment. ) 


In  the  following  form,  classification  of  stock  is  provided 
for.  This  charter  also  includes  almost  every  purpose  of  a 
moneyed  corporation  that  will  be  allowed  to  an  incorporation 
ttnder  the  Business  Corporations  Law. 

Form  5.  (c)     Certificate    of    Incorporation.        Preferred 
Stock. 


CERTIFICATE  OF  INCORPORATION 

OF   THE 

HOLLAND    SECURITIES    COMPANY. 


We,  the  undersigned,  all  being  of  full  age  and  two-thirds  being  citi- 
zens of  the  United  States  and  one  of  us  a  resident  of  the  State  of  New 
York,  for  the  purpose  of  forming  a  corporation  under  the  Business  Cor- 


l82  NEW    YORK    CORPORATIONS. 

porations   Law   of  the   State  of   New   York,   do  hereby  certify  and   set 
forth : 

First.    The  name  of  said  corporation  shall  be 
"  Holland  Securities  Company." 

Second.  The  purposes  for  which  said  corporation  is  to  be  formed 
are  as  follows : 

(a)  To  buy,   sell,   hold  and  generally  to   deal   in  and  with   stocks, 
bonds,  debentures,  mortgages  and  securities  of  all  kinds ;  to  borrow  money, 
make  loans,  advance  money  on  contracts,  make  investments  and  generally 
act  as.  investment  brokers ;   to  issue  notes,  bonds,  securities  and   deben- 
tures which  may  be  secured  by  mortgage  or  otherwise  upon  property  real 
and  personal  of  the  Corporation  under  the  provisions  of  Section  2  of  the 
Stock  Corporation  Law  of  the   State  of  New  York;   to  purchase,  hold, 
improve,  sell,  lease  or  exchange  real  estate  and  generally  to  conduct  any 
financial   business   permissible   under   the   Business   Corporations   Law  of 
the  State  of  New  York. 

(b)  To  act  as  agents,  factors,  brokers,  commission  merchants,  con- 
tractors, lessees  and  managers  of  estates  or  otherwise  in  entering  into, 
undertaking,  performing,  negotiating,  executing,  conducting  and  transact- 
ing for  persons,  firms  and  corporations  upon  commission  or  otherwise,  any 
and  all  the  things  set  forth  in  this  certificate  that  it  can  do  for  itself,  and 
to  exercise  all  of  its  powers  to  the  same  extent  that  a  natural  person 
might  do,  and  in  any  part  of  the  world  to  the  full  extent  permitted  to 
corporations  organized  under  the  Business  Corporations  Law  of  the  State 
of  New  York. 

(c)  To  purchase,  acquire,  hold  and  dispose  of  the  stocks,  bonds  and 
other  evidences  of  indebtedness  of  any  corporation,  domestic  or  foreign, 
and  issue  in  exchange  therefor  its  stock,  bonds  or  other  obligations,  and 
to  exercise  while  owner  of  the  stock  of  other  corporations  all  the  rights, 
powers  and  privileges  of  ownership,  including  the  right  to  vote  thereon. 

(d)  To  guarantee  or  cause  to  be  guaranteed  the  payment  of  divi- 
dends or  interest  on  any  bonds,  stocks,  debentures  or  other  securities  of 
this  corporation,  and  to  guarantee  or  cause  to  be  guaranteed  the  con- 
tracts and  obligations  of  this  corporation  whenever  proper  or  necessary 
for  its  business  in  the  judgment  of  its  Board  of  Directors. 

(e)  To  conduct  or  transact  business  in  any  of  the  states,  territories, 
colonies  or  dependencies  of  the  United  States  and  in  any  and  all  foreign 
countries;  to  have  one  or  more  offices  therein,  and  therein  to  hold,  pur- 
chase, mortgage  and  convey  real  and  personal  property  without  limit  as 

to  the  amount,  save  as  imposed  by  local  laws. 

• 

Third.  The  amount  of  capital  stock  of  said  corporation  shall  be  two 
hundred  thousand  dollars  ($200,000),  and  the  amount  of  capital  with 
which  said  corporation  will  begin  business  is  ten  thousand  dollars 
($10,000). 

Fourth.  The  number  of  shares  of  which  said  capital  stock  is  to  con- 
sist shall  be  two  thousand  (2,000)  shares  of  the  par  value  of  one  hun- 
dred dollars  ($100^  each,  of  which  one  thousand  (1,000)  shares  of  the 
total  par  value  of  one  hundred  thousand  dollars  ($100,000)  shall  be  com- 
mon stock  and  one  thousand  (1,000)  shares  of  the  total  par  value  of  one 
hundred  thousand  dollars  ($100,000)  shall  be  preferred  stock. 

Said  preferred  stock  shall  be  entitled  to  an  annual  cumulative  divi- 
dend of  six  per  cent.  (6%)  payable  semi-annually  on  the  10th  days  of 


ORGANIZATION.       FORMS.  183 

January  and  July  of  each  year  before  any  dividends  are  paid  on  the 
common  stock,  and,  after  said  common  stock  has  in  any  one  year  received 
a  dividend  of  six  per  cent.  (6%),  to  participate  equally  with  said  com- 
mon stock,  share  and  share  alike,  in  all  further  dividends  that  may  be  de- 
clared during  such  year  until  said  preferred  stock  has  received  a  total 
dividend  for  that  year  up  to  but  not  exceeding  twelve  per  cent.  (12%), 
and  such  preferred  stock  shall  be  entitled  to  preference  in  the  event  of 
dissolution  or  liquidation  of  the  corporation.  The  holders  of  such  pre- 
ferred stock  shall  not  be  entitled  to  vote  unless  unpaid  arrearages  of  divi- 
dends shall  have  accumulated  on  such  stock  to  the  amount  of  fifteen  per 
centum,  when  they  shall  have  the  right  to  vote  and  shall  retain  the  same 
until  all  arrearages  of  dividends  on  such  stock  have  been  paid  in  full. 

Fifth.  The  principal  business  office  of  the  corporation  shall  be  lo- 
cated in  the  Village  of  Mineola  in  the  County  of  Nassau  and  State  of 
New  York. 

Sixth.     The  duration  of  said  corporation  shall  be  unlimited. 

Seventh.  The  number  of  directors  of  said  corporation  shall  be  five 
(5). 

Eighth.  The  names  and  post-office  addresses  of  the  directors  of  the 
corporation  for  the  first  year  are  as  follows : 

NAMES.  ADDRESSES. 

James  T.  Franklin  Port  Washington,  New  York. 

Charles  M.  Parsons  Plainfield,  New  Jersey. 

William  G.  McGowan Mineola,  New  York. 

Harry  T.  Coombs  Mineola,  New  York. 

John  Harriman 170  Broadway,  New  York  City. 

Ninth.  The  names  and  post-office  addresses  of  the  subscribers  to 
this  certificate  and  a  statement  of  the  number  of  shares  of  stock  which 
each  agrees  to  take  in  the  same  are  as  follows : 

NAMES.  ADDRESSES.  SHARES. 

William  G.  McGowan Mineola,  New  York  I 

James  T.  Franklin Port  Washington,  New  York  i 

John  Harriman 170  Broadway,  New  York  City I 

In  Witness  Whereof,  we  have  made  and  signed  this  certificate  in 
duplicate  this  isth  day  of  February,  1906. 

WILLIAM  G.  McGywAN. 
JAMES  T.  FRANKLIN. 
JOHN  HARRIMAN. 

STATE  OF  NEW  YORK,       \  s?  • 
County    of    New    York,    f 

Personally  appeared  before  me  this  isth  day  of  February,  1906,  Wil- 
liam G.  McGowan,  James  T.  Franklin  and  John  Harriman,  to  me  per- 
sonally known  to  be  the  individuals  described  in  and  who  executed  the 
foregoing  certificate,  and  severally  acknowledged  that  they  executed  the 
same  for  the  purposes  therein  set  forth. 

THEODORE  T.  LANSFORD, 

j  COMMISSIONER'S  )  Commissioner  of  Deeds, 

/  SEAL.  \  New  York  City. 


184  NEW    YORK    CORPORATIONS. 

The  form  that  follows  is  peculiar  in  its  restriction  in 
paragraph  ten  of  the  voting  power  of  stock;  also  the  usual 
power  of  the  directors  to  conduct  the  corporate  business  is 
much  abridged  by  the  provisions  of  paragraph  eleven. 

Form  5.  (d)     Certificate    of  Incorporation.     Special  Pro- 
visions. 


CERTIFICATE  OF  INCORPORATION 

OF  THE 
WELLSFORD  REALTY  CORPORATION. 


We,  the  undersigned,  all  being  of  full  age  and  two-thirds  being  citi- 
zens of  the  United  States  and  one  of  us  a  resident  of  the  State  of  New 
York,  for  the  purpose  of  forming  a  corporation  under  the  Business  Cor- 
porations Law  of  the  State  of  New  York,  do  hereby  certify  and  set 
forth : 

First.    The  name  of  said  corporation  shall  be 

"  Wellsford  Realty  Corporation." 

Second.  The  purposes  for  which  said  corporation  is  to  be  formed 
are  as  follows : 

(a)  To   take,    lease,    purchase,    hire   or   otherwise   acquire,    and   to 
own,  use,  hold,  sell,  convey,  lease,  exchange,  mortgage,  improve,  develop, 
cultivate,  and  otherwise  handle,  deal  in  and  dispose  of  real  estate,  real 
property  and  any  interest  or  right  therein. 

(b)  To  take,  purchase  or  otherwise  acquire,  and  to  own,  use,  hold, 
sell,  convey,  exchange,  hire,  lease,  pledge,  mortgage  and  otherwise  deal 
in  and  dispose  of  goods,  chattels,  stocks,  bonds,  mortgages,   debentures, 
securities,  chattels  real  and  choses  in  action  and  generally  to  buy,  sell  and 
do  a  mercantile  business. 

(c)  To  convert  and  appropriate  any  land  that  may  be  acquired  or 
controlled  by  this  corporation  into  and   for  ways,   roads,  paths,   streets, 
alleys,  lanes,  side-walks,  courts,  lawns,  parks,  boulevards,  squares,  build- 
ing lots,  additions,  town-sites  and  pleasure  grounds,  and  to  plot,  clear, 
grade,   survey,    develop,   improve,   cultivate,   manage   and   administer   any 
lands  owned  or  controlled  by  this  corporation. 

(d)  To   erect  or   have   erected,   to   construct   or   have   constructed, 
houses,  buildings,   store-rooms,   factories,   tenements,   edifices,   works  and 
structures  of  every  description  and  to  rebuild,  enlarge,  improve,  alter,  re- 
pair, raze  and  remove  existing  houses,  buildings  and  structures  of  every 
kind  and  description  and  to  buy,  sell,  own,  use,  manage  and  lease  the 
same  or  similar  structures. 

(e)  To  warrant  the  title  to  lands  or  to  any  estate  or  interest  in 
lands  sold  by  said  corporation;  to  issue  notes,  bonds  and  debentures  se- 


ORGANIZATION.      FORMS.  185 

cured  by  mortgage  or  deed  of  trust  upon  the  property  of  said  corporation 
or  otherwise  and  to  sell  and  dispose  of  the  same  for  the  benefit  of  the 
corporation  or  for  any  lawful  purpose. 

(f)  To  purchase,  lease,  exchange  or  otherwise  acquire  any  and  all 
rights,   permits,   privileges,   franchises   and   concessions   suitable   or   con- 
venient for  any  of  the  purposes  of  its  business. 

(g)  To  conduct  and  transact  business  in  any  of  the  states,  terri- 
tories, colonies  or  dependencies  of  the  United  States  and  in  any  or  all 
foreign  countries ;   to  have  one  or  more  offices  therein,  and  therein  to 
hold,  purchase,   mortgage  and  convey   real   and  personal  property  with- 
out limit  as  to  amount  but  subject  to  local  laws. 

(h)  To  do  any  or  all  things  set  forth  in  this  certificate  as  objects, 
purposes,  powers  or  otherwise,  to  the  same  extent  and  as  fully  as  natural 
persons  might  do  and  in  any  part  of  the  world  as  principals,  agents, 
contractors,  lessees  or  otherwise. 

Third.  The  amount  of  capital  stock  of  said  corporation  shall  be 
Fifteen  Thousand  Dollars  ($15,000). 

Fourth.  The  number  of  shares  composing  said  capital  stock  shall  be 
one  hundred  and  fifty  (150)  shares  of  the  par  value  of  one  hundred 
dollars  ($100)  each  and  the  amount  of  capital  with  which  said  corpora- 
tion will  begin  business  is  five  hundred  dollars  ($500). 

Fifth.  The  principal  business  office  of  said  corporation  shall  be  lo- 
cated in  the  Borough  of  Manhattan  in  the  County,  City  and  State  of 
New  York. 

Sixth.    The  duration  of  said  corporation  shall  be  perpetual. 

Seventh.  The  number  of  directors  of  said  corporation  shall  be  seven 
(7). 

Eighth.  The  names  and  post-office  addresses  of  the  directors  of  said 
corporation  for  the  first  year  are  as  follows : 

NAMES.  ADDRESSES. 

J.  Edward  Parks .66  W.  84th  St.,  New  York  City. 

Harry  Edwards  Tompkinsville,  Staten  Id.,  N.  Y. 

Harvey  M.  Moore  76  W.  iiSth  St.,  New  York  City. 

Stanley  H.  French 46  Montgomery  St.,  Jersey  City,  N.  J. 

Samuel  W.  O'Conner Flushing,  Long  Island,  N.  Y. 

Henry  Douglas  75  E.  38th  St.,  New  York  City. 

James  Elliot  170  Broadway,  New  York  City. 

Ninth.  The  names  and  post-office  addresses  of  the  subscribers  to 
this  certificate  and  the  number  of  shares  of  stock  which  each  agrees  to 
take  in  said  corporation  are  as  follows: 

NAMES.  ADDRESSES.  SHARES. 

J.  Edward  Parks  66  W.  84th  St.,  New  York  City. ...      3 

Harry  Edwards  Tompkinsville,  Staten  Id.,  N.  Y. . . .       3 

Harvey  M.  Moore  76  W.  n8th  St.,  New  York  City. . .       3 

Tenth.  At  each  election  of  directors  or  meeting  of  stockholders,  each 
stockholder  of  record  holding  one  or  more  shares  of  stock  and  not  being 
ia  default  on  his  subscription  instalments,  shall  have  one  vote  and  no 
more. 


1 86  NEW   YORK    CORPORATIONS. 

Eleventh.  No  real  estate  shall  be  bought  or  sold  by  this  corporation 
unless  with  the  consent  of  a  majority  of  the  stockholders  present  at  any 
regular  meeting  of  stockholders  or  at  some  special  meeting  of  stock- 
holders duly  called  for  that  purpose. 

Twelfth.  The  by-laws  of  this  corporation  may  be  amended  only  by 
the  majority  vote  of  the  entire  number  of  stockholders  entitled  to  vote 
cast  at  any  regular  meeting  of  the  stockholders  or  at  some  special 
meeting  of  the  stockholders  duly  called  for  the  purpose. 

Thirteenth.  Pursuant  to  Section  40  of  the  Stock  Corporation  Law, 
as  amended,  this  corporation  shall  have  power  to  purchase,  acquire,  hold 
and  dispose  of  the  stocks,  bonds  and  other  evidences  of  indebtedness  of 
any  corporation,  domestic  or  foreign,  and  to  issue  in  exchange  therefor 
its  stock,  bonds  and  other  obligations. 

In  Witness  Whereof,  we  have  made  and  signed  this  certificate  in 
duplicate,  this  ist  day  of  February,  1906. 

J.  EDWARD  PARKS. 
HARRY  EDWARDS. 
HARVEY  M.  MOORE. 
(  Acknowledgment. ) 

(See  "Table  of  Fees,"  page  347.) 

The  certificates  of  incorporation  for  navigation,  gas  and 
electric,  and  telegraph  and  telephone  companies  are  in  sub- 
stantially the  same  form  as  the  certificates  given  for  business 
corporations.  In  all  these  cases,  however,  the  reference  of  the 
introductory  charter  clause  is  to  the  Transportation  Corpora- 
tions Law,  instead  of  the  Business  Corporations  Law.  The 
other  points  of  difference  are  as  follows : 

Gas  or  Electric  Companies.  Organized  under  Ar- 
ticle VI  of  the  Transportation  Corporations  Law. 
Amount  with  which  business  will  be  begun  need  not  be 
stated.  Duration  must  not  exceed  fifty  years.  Number 
of  directors  must  not  be  less  than  three  nor  more  than 
thirteen.  A  statement  of  the  towns,  villages,  cities  and 
counties  where  operations  are  to  be  carried  on  must  be 
included.  (T.  C.  L.,  §  60.) 

Navigation  Companies.  Organized  under  Article 
II  of  the  Transportation  Corporations  Law.  Capitaliza- 
tion must  be  not  less  than  $5,000  nor  more  than  $4,000,- 
ooo.  Amount  with  which  business  will  be  begun  need 
not  be  stated,  but  at  least  ten  per  cent,  of  the  capital 


ORGANIZATION.      FORMS.  1 87 

stock  must  be  subscribed  by  the  incorporators  and  ten 
per  cent,  of  the  subscription  be  paid  in  cash.  Duration 
must  not  exceed  fifty  years.  Number  of  directors  must 
not  be  less  than  five  nor  more  than  thirteen.  A  state- 
ment must  be  made  of  the  waters  to  be  navigated,  and, 
if  ocean-going,  the  ports  between  which  the  vessels  will 
ply.  The  affidavit  of  at  least  three  directors  that  ten 
per  cent,  of  the  capital  stock  has  been  subscribed  and 
ten  per  cent,  of  the  subscriptions  have  been  actually  paid 
in,  must  accompany  certificate.  (T.  C.  L.,  §  10.) 

Telegraph  or  Telephone  Companies.  Organized 
under  Article  VIII  of  the  Transportation  Corporations 
Law.  Incorporators  must  number  seven  or  more. 
Amount  with  which  business  will  be  begun  need  not  be 
stated.  Number  of  directors  must  not  be  less  than  seven. 
A  statement  of  the  general  route  to  be  followed  and  the 
points  to  be  connected  must  be  included.  (T.  C.  L., 
§  100.) 

Form  6.     By-Laws.     Short  Set. 


BY-LAWS 

OF  THE 

HELLMUND-COLLBOHM   CASTING  COMPANY 

of 
New  York  City. 


ARTICLE  I. — STOCK. 

1.  Certificates  of  Stock  shall  be  issued  in  order  by  number  from 
the   stock  certificate  book,  and  each  certificate  shall  be  signed  by  the 
President  and  Treasurer  and  sealed  by  the  Secretary,  and  a  record  thereof 
kept  on  the  stub. 

2.  Transfers  of  Stock  shall  be  made  upon  the  books  of  the  Com- 
pany, and  the  old  certificate  must  be  surrendered  for  cancellation  before 
a  new  certificate  is  issued.     The  stock  books  of  the  Company  shall  be 
closed   for   transfers   twenty   days   before   general   elections,   and  twenty 
days  before  dividend   days. 


1 88  NEW   YORK    CORPORATIONS. 

3.  The  Treasury  Stock  of  the  Company  shall  consist  of  such  issued 
and  outstanding  stock  of  the  Company  as  may  be  donated  to  the  Com- 
pany or  be  otherwise  acquired,  and  shall  be  held  subject  to  disposal  by 
the  Board  of  Directors.  Such  stock  shall  neither  vote  nor  participate  in 
dividends  while  held  by  the  Company. 

ARTICLE  IT. — STOCKHOLDERS. 

1.  The  Annual  Meeting  of  the   stockholders   shall  be  held  in  the 
office  of  the  Company  in  New  York  City  at  3  p.  m.  on  the  second  Tues- 
day in  January  of  each  year,  if  not  a  legal  holiday,  but  if  a  legal  holiday 
then  on  the  day  following. 

2.  Special  Meetings  of  the  stockholders  may  be  called  at  the  office 
of  the  Company  or  at  any  other  place  in  New  York  City  at  any  time  by 
resolution  of  the  Board  of  Directors,  or  upon  written  request  of  stock- 
holders representing  one-third  of  the  outstanding  stock. 

3.  Notice   of   Meetings,    written   or   printed,    for   every   regular   or 
special  meeting  of  the  stockholders,  shall  be  prepared  and  mailed  to  each 
stockholder  at  his  last  known  post-office  address  not  less  than  ten  days 
before  such  meeting,  and  if  for  a  special  meeting,  the  notice  shall  state 
the  object  or  objects  thereof.    No  failure  or  irregularity  of  notice  of  any 
regular  meeting  shall  invalidate  such  meeting  or  any  proceeding  thereat 

4.  A  Quorum  at  any  meeting  of  the  stockholders  shall  consist  of  a 
majority  of  the  voting  stock  of  the  Company,  represented  in  person  or 
by  proxy.     A  majority  of  such  quorum  shall  decide  any  question  which 
may  come  before  the  meeting. 

5.  The  Election  of  Directors  shall  be  held  at  the  annual  meeting  of 
stockholders  and  shall,  after  the  first  election,  be  conducted  by  two  in- 
spectors of  election  appointed  by  the  President  for  that  purpose.     The 
election  shall  be  by  ballot,  and  each  stockholder  of  record  shall  be  en- 
titled to  as  many  votes  as  shall  equal  the  number  of  his  shares  of  stock, 
multiplied  by  the  number  of  directors  to  be  elected,  and  he  may  cast 
all  of  such  votes  for  a  single  director  or  he  may  distribute  them  among 
the  number  to  be  voted   for,  or  any  two  or  more  of  them,  as  he  may 
see  fit.     The  inspectors  for  the  first  election  shall  be  appointed  by  the 
directors  named  in  the  certificate  of  incorporation. 

6.  The  Order  of  Business  at  the  annual  meeting,  and,  as  far  as  pos- 
sible, at  all  other  meetings  of  the  stockholders  shall  be: 

1.  Calling  of  Roll. 

2.  Proof  of  due  notice  of  Meeting. 

3.  Reading  and  disposal  of  any  unapproved  Minutes. 

4.  Annual  Reports  of  Officers  and  Committees. 

5.  Election  of  Directors. 

6.  Unfinished   Business. 

7.  New  Business. 

8.  Adjournment. 

ARTICLE  III. — DIRECTORS. 

i.  The  Business  and  Property  of  the  Company  shall  be  managed  by 
a  Board  of  five  Directors  who  shall  be  stockholders  and  who  shall  be 


ORGANIZATION.      FORMS.  189 

elected  annually  by  the  stockholders  for  the  term  of  one  year,  and  shall 
serve  until  their  successors  are  elected  and  qualified.  Any  vacancies 
may  be  filled  by  the  Board  for  the  unexpired  term.  Directors  shall  re- 
ceive no  compensation  for  their  services. 

2.  The  Regular  Meetings  of  the  Board  of  Directors  shall  be  held  in 
the  principal  office  of  the  Company  at  3  p.  m.  on  the  second  Tuesday  of 
each  month,  if  not  a  legal  holiday,  but  if  a  legal  holiday  then  on  the  day 
following. 

3.  Special  Meetings   of   the    Board    of   Directors   may   be   called   at 
any  time  by  the  President  or  by  any  two  members  of  the  Board,  or  they 
may  be  held  at  any  time  and  place  without  notice  by  unanimous  written 
consent  of  all  the  members,  or  with  the  presence  of  all  the  members  at 
such  meetings. 

4.  Notices  of  both  regular  and  special  meetings  shall  be  mailed  by 
the  Secretary  to  each  member  of  the  Board  not  less  than  five  days  before 
any  such  meeting,   and   notices   of  special  meetings   shall   state  the  pur- 
poses thereof.     No  failure  or  irregularity  of  notice  of  any  regular  meet- 
ing shall  invalidate  such  meeting  or  any  proceeding  thereat. 

5.  A  Quorum  at  any  meeting  shall  consist  of  a  majority  of  the  en- 
tire membership  of  the  Board.     A  majority  of  such  quorum  shall  decide 
any  question  that  may  come  before  the  meeting.- 

6.  Officers  of  the  Company  sha.ll  be  elected  by  ballot  by  the  Directors 
at  their  first  meeting  after  the  election  of  directors  each  year.     If  any 
office  becomes  vacant  during  the  year,  the   directors  shall  fill  the  same 
for  the  unexpired  term.     The  directors  shall  fix  the  compensation  of  the 
officers  and  agents  of  the  Company. 

7.  The  Order  of  Business  at  any  regular  or  special  meeting  of  the 
directors  shall  be : 

1.  Reading  and  disposal  of  any  unapproved  Minutes. 

2.  Reports  of  Officers  and  Committees. 

3.  Unfinished  Business. 

4.  New  Business. 

5.  Adjournment. 

ARTICLE  IV. — OFFICERS. 

1.  The  Officers  of  the  Company  shall  be  a  President,  a  Vice- President, 
a  Secretary  and  a  Treasurer,  who  shall  be  elected  for  one  year  and  hold 
office  until  their  successors  are  elected.     The  positions  of  Secretary  and 
Treasurer  may  be  held  by  one  person. 

2.  The  President  shall  preside  at  all   meetings ;   shall  have  general 
supervision  of  the  affairs  of  the  Company;  shall  sign  or  countersign  all 
certificates,  contracts  or  other  instruments  of  the  Company  as  authorized 
by  the  Directors;   shall  make  reports  to  the  directors  and  stockholders 
and  perform  all  such  other  proper  duties  as  are  incident  to  his  office  or 
which  are  required  of  him  by  the  Board  of  Directors.     In  the  absence  or 
disability    of   the    President,    the    Vice-President    shall    exercise    all    his 
functions. 


NEW    YORK    CORPORATIONS. 

3.  The  Secretary  shall  issue  notices  for  all  meetings ;  shall  keep  their 
minutes ;   shall   have  charge  of  the  seal  and  the  corporate  books ;   shall 
sign  with  the  President  such  instruments  as  require  such  signature,  and 
shall   make   such   reports   and  perform   such   other  proper   duties  as   are 
incident  to  his  office  or  are  required  of  him  by  the  Board  of  Directors. 

4.  The  Treasurer  shall  have  the  custody  of  all  moneys  and  securities 
of  the   Company,  and  shall  keep   regular  books  of  account  and  balance 
the  same  annually.     He  shall  sign  or  countersign  such  instruments  as  re- 
quire his  signature,  shall  perform  all  proper  duties  incident  to  his  office 
or  that  may  be  required  of  him  by  'the  Board,  and  shall  give  bond  for 
the  faithful  performance  of  his  duties  in  such  sum  and  with  such  sureties 
as  may  be  required  by  the  Board  of  Directors. 

ARTICLE  V. — DIVIDENDS  AND  FINANCE. 

1.  Dividends  shall  be  declared  only  from  the  surplus  profits  at  such 
times  as  the  Board  shall  direct,  and  no  dividend  shall  be  declared  that 
will  impair  the  capital  of  the  Company. 

2.  The  Moneys  of  the  Company  shall  be  deposited  in  the  name  of 
the   Company   in   such   trust  company,   bank   or  banks   as   the   Board   of 
Directors  shall  designate,  and  be  drawn  out  only  by  check  signed  by  the 
Treasurer  and  countersigned  by  the  President. 

ARTICLE  VI. — SEAL. 

i.  The  Corporate  Seal  of  the  Company  shall  consist  of  two  concen- 
tric circles,  between  which  is  the  name  of  the  Company,  and  in  the  centre 
shall  be  inscribed  "Incorporated  1906,  New  York"  and  such  seal,  as  im- 
pressed on  the  margin  hereof,  is  hereby  adopted  as  the  Corporate  Seal 
of  the  Company. 

ARTICLE  VII. — AMENDMENTS. 

1.  These  By-Laivs  may  be  amended,  repealed  or  altered,  in  whole  or 
in  part,  by  a  majority  vote  of  the  entire  outstanding  stock  of  the  Com- 
pany at  any  regular  meeting  of  the  stockholders,  or  at  any  special  meet- 
ing where  such  action  has  been  announced  in  the  call  and  notice  of  such 
meeting. 

2.  The  Board  of  Directors  shall  not  alter  nor  repeal  any  by-laws 
adopted  by  the  stockholders  of  the  Company,  but  may  adopt  additional 
by-laws  in  harmony  therewith. 


(See  Chap.  IV.) 

The  foregoing  by-laws  meet  the  requirements  of  the 
New  York  statutes.  While  brief,  the  set  is  comprehensive 
and  may  be  readily  adapted  to  the  needs  of  any  ordinary 
business  corporation  of  moderate  size.  In  use  it  has  proved 


ORGANIZATION.       FORMS.  19! 

an  excellent  working  set.     For  larger  corporations  the  fol- 
lowing set  will  be  found  more  generally  available. 

Form  7.     By-Laws.     Extended  Form. 

BY-LAWS 
OF  THE 

LEIGHTON  COAL  COMPANY. 
Incorporated  under  the  Laws  of  New  York. 


ARTICLE  I. — STOCK. 

SEC.  i.     Certificates  of  Stock, 

Each  stockholder  of  the  Company  whose  stock  has  been  paid  for  in 
full  shall  be  entitled  to  a  certificate  or  certificates  showing  the  amount  of 
stock  of  the^Company  standing  on  the  books  in  his  name.  Each  certificate 
shall  be  numbered,  bear  the  signatures  of  the  President  and  Treasurer 
and  the  seal  of  the  Company,  and  be  issued  in  numerical  order  from  the 
stock  certificate  book.  A  full  record  of  each  certificate  of  stock,  as  issued, 
must  be  entered  on  the  corresponding  stub  of  the  stock  certificate  book. 

SEC.  2.     Transfers  of  Stock. 

Transfers  of  stock  shall  be  made  upon  the  proper  stock  books  of  the 
Company,  and  must  be  accompanied  by  the  surrender  of  the  duly  en- 
dorsed certificate  or  certificates  representing  the  transferred  stock.  Sur- 
rendered certificates  shall  be  cancelled  and  attached  to  the  corresponding 
stubs  in  the  stock  certificate  book  and  new  certificates  issued  to  the  parties 
entitled  thereto.  The  stock  books  shall  be  closed  to  transfers  twenty  days 
before  general  elections  and  twenty  days  before  dividend  days. 

SEC.  3.    Lost  Certificates. 

The  Board  of  Directors  may  order  a  new  certificate,  or  certificates, 
of  stock  to  be  issued  in  the  place  of  any  certificate  or  certificates  of  the 
Company  alleged  to  have  been  lost  or  destroyed,  but  in  every  such  case 
the  owner  of  the  lost  certificate  or  certificates  shall  first  cause  to  be  given 
to  the  Company  a  bond  in  such  sum,  not  less  than  the  par  value  of  such 
lost  or  destroyed  certificate  or  certificates  of  stock,  as  said  Board  may 
direct,  as  indemnity  against  any  loss  or  claim  that  the  Company  may  incur 
by  reason  of  such  issuance  of  stock  certificates;  but  the  Board  of 
Directors  may,  in  its  discretion,  refuse  to  so  replace  any  lost  certificate, 
save  upon  the  order  of  some  court  having  jurisdiction  in  such  matter. 

SEC.  4.    Stock  and  Transfer  Books. 

The  stock  and  transfer  books  of  the  Company  shall  be  kept  at  its 
office,  No.  52  Broadway  in  the  City  of  New  York,  and  shall  be  open  during 
business  hours  to  the  inspection  of  any  stockholder  or  judgment  creditor 
of  the  Company. 


192  NEW   YORK    CORPORATIONS. 

SEC.  5.     Treasury  Stock. 

All  issued  and  outstanding  stock  of  the  Company  that  may  be  donated 
to,  or  be  purchased  by,  the  Company,  shall  be  treasury  stock  and  shall 
be  held  subject  to  disposal  by  the  action  of  the  Board  of  Directors.  Such 
stock  shall  neither  vote  nor  participate  in  dividends  while  held  by  the 
Company. 

ARTICLE  II. — STOCKHOLDERS. 

SEC.  i.     Annual  Meetings. 

The  regular  annual  meetings  of  the  stockholders  shall  be  held  in  the 
office  of  the  Company  at  No.  52  Broadway,  New  York  City,  at  12  m.  on 
the  second  Monday  of  January  in  each  year,  if  not  a  legal  holiday,  but 
if  a  legal  holiday  then  on  the  day  following.  At  this  meeting  the  direc- 
tors for  the  ensuing  year  shall  be  elected,  the  officers  of  the  Company 
shall  present  their  annual  reports,  and  the  Secretary  shall  have  on  file 
for  inspection  and  reference  an  alphabetical  list  of  the  stockholders,  giv- 
ing the  amount  of  stock  held  by  each  as  shown  by  the  stock  books  of  the 
Company  twenty  days  before  the  date  of  such  annual  meeting. 

SEC.  2.    Special  Meetings. 

Special  meetings  of  the  stockholders  may  be  held  at  any  time  in  the 
office  of  the  Company,  pursuant  to  a  resolution  of  the  Board  of  Directors, 
or  by  a  call  signed  by  stockholders  holding  a  majority  of  the  voting 
stock  of  the  Company.  Calls  for  special  meetings  shall  specify  the  time, 
place  and  object  or  objects  thereof,  and  no  other  business  than  that  speci- 
fied in  the  call  shall  be  considered  at  any  such  meeting. 

SEC.  3.    Notice  of  Meetings. 

A  written  or  printed  notice  of  every  regular  or  special  meeting  of 
the  stockholders,  stating  the  time  and  place,  and  in  case  of  special  meet- 
ings, the  objects  thereof,  shall  be  prepared  and  mailed  by  the  Secretary, 
postage  prepaid,  to  the  last  known  post-office  address  of  each  stock- 
holder, at  least  ten  days  before  the  date  of  any  such  meeting.  Any  failure 
or  irregularity  of  notice  of  a  regular  meeting  shall  not  affect  the  validity 
of  such  meeting  or  of  any  proceedings  thereat. 

If  an  election  of  directors  is  to  be  held  at  any  such  meeting,  the 
Secretary  shall,  in  addition  to  the  prescribed  notice  by  mail,  give  notice 
of  such  meeting  and  election  by  publication  thereof  at  least  once  a  week 
for  two  successive  weeks  immediately  preceding  such  election,  in  a  news- 
paper published  in  the  county  where  such  election  is  to  be  held. 

SEC.  4.     Voting. 

Only  stockholders  of  record  shall  be  entitled  to  vote  at  the  regular 
and  special  meetings  of  stockholders.  At  such  meetings  each  stockholder 
shall  be  entitled  to  one  vote  for  each  share  of  stock  held  in  his  name. 

SEC.  5.    Election  of  Directors. 

At  each  annual  meeting  of  the  stockholders  of  the  Company  seven 
Directors  shall  be  elected,  who  shall  serve  until  the  election  and  accep- 
tance of  their  duly  qualified  successors.  All  such  elections  shall  be  by 
ballot,  and  the  candidates,  to  the  number  to  be  elected,  receiving  the 
highest  number  of  votes  shall  be  declared  elected. 

If  for  any  reason  directors  are  not  elected  at  the  regular  meeting 
of  stockholders,  a  special  meeting  shall  be  called  for  the  purpose  within 


ORGANIZATION.      FORMS. 

thirty  days  thereafter,  at  which  directors  shall  be  elected  in  all  respects 
as  at  the  annual  meeting. 

At  each  election,  after  the  first,  two  inspectors  shall  be  appointed  by 
the  President  to  conduct  the  election  of  directors  to  serve  for  the  ensu- 
ing year.  These  inspectors  shall  be  sworn  to  the  faithful  discharge  of 
their  duty,  and  shall  then  take  charge  of  the  election.  No  person  who 
is  a  candidate  for  the  office  of  director  shall  act  as  an  inspector  of 
election. 

In  all  elections  for  directors,  each  stockholder  of  record  shall  be  en- 
titled to  cast,  for  each  share  of  stock  held  by  him,  as  many  votes  as  there 
are  directors  to  be  elected,  and  he  may  cast  the  whole  number  of  such 
votes  for  one  candidate,  or  distribute  them  among  two  or  more  candi- 
dates, as  he  may  prefer. 

SEC.  6.     Quorum. 

A  majority  of  the  outstanding  stock,  exclusive  of  treasury  stock, 
shall  be  necessary  to  constitute  a  quorum  at  meetings  of  stockholders. 
When  a  quorum  is  present  at  any  meeting,  a  majority  of  the  stock  rep- 
resented thereat  shall  decide  any  question  brought  before  such  meeting. 
In  the  absence  of  a  quorum,  those  present  may  adjourn  the  meeting  from 
day  to  day,  but  until  a  quorum  is  secured  may  transact  no  business. 

SEC.  7.    Proxies. 

Any  stockholder  entitled  to  vote  may  be  represented  at  any  regular 
or  special  meeting  of  stockholders  by  a  duly  executed  proxy.  Proxies 
shall  be  in  writing  and  properly  signed,  but  shall  require  no  other  at- 
testation. No  proxy  shall  be  recognized  unless  executed  within  eleven 
months  of  the  date  of  the  meeting  at  which  it  is  presented. 

SEC.  8.     Officers  of  Meetings. 

The  President,  if  present,  shall  preside  at  all  meetings  of  the  stock- 
holders. In  his  absence,  the  next  officer  in  due  order  who  may  be  present 
shall  preside.  For  the  purposes  of  these  by-laws,  the  due  order  of  offi- 
cers shall  be  as  follows :  President,  Vice-President  and  Treasurer. 

The  Secretary  of  the  Company  shall  keep  a  faithful  record  of  the 
proceedings  of  all  stockholders'  meetings. 

SEC.  9.     Order  of  Business. 

The  order  of  business  at  the  annual  meeting,  and,  so  far  as  practi- 
cable, at  all  other  meetings  of  the  stockholders  shall  be  as  follows: 

1.  Calling  of  Roll. 

2.  Proof  of  due  notice  of  Meeting. 

3.  Reading  and  disposal  of  any  unapproved  Minutes. 

4.  Annual  Reports  of  Officers  and  Committees. 

5.  Election  of  Directors. 

6.  Unfinished  Business. 

7.  New  Business. 

8.  Adjournment. 

ARTICLE  III. — DIRECTORS. 

SEC.  i.    Number  and  Authority. 

The  Board  of  Directors  shall  consist  of  seven  members  and  shall 
have  entire  charge  of  the  property,  interests,  business  and  transactions 


194  NEW    YORK    CORPORATIONS. 

of  the  Company,  with  full  power  and  authority  to  manage  and  conduct 
the  same. 

SEC.  2.     Qualifications. 

No  person  shall  be  elected,  nor  shall  be  competent  to  act  as  a  director 
of  this  Company,  unless  he  is  at  the  time  of  election  the  holder  of  record 
of  at  least  one  share  of  its  stock.  At  least  one  of  the  directors  of  the 
Company  must  be  resident  in  the  State  of  New  York. 

SEC.  3.     Vacancies. 

Any  vacancy  occurring  in  the  Board  of  Directors  may  be  filled  for 
the  unexpired  term  by  a  majority  vote  of  the  remaining  members.  In 
event  of  the  membership  of  the  Board  falling  below  the  number  neces- 
sary for  a  quorum,  a  special  meeting  of  the  stockholders  shall  be  called 
and  such  number  of  directors  shall  be  elected  thereat  as  may  be  neces- 
sary to  restore  the  membership  of  the  Board  to  its  full  number. 

SEC.  4.     Regular  Meetings. 

The  regular  meetings  of  the  Board  of  Directors  shall  be  held  in  the 
office  of  the  Company,  in  the  City  of  New  York,  at  3  p.  m.,  on  the  second 
Monday  of  each  month,  if  not  a  legal  holiday,  but  if  a  legal  holiday,  then 
on  the  day  following. 

SEC.  5.     Special  Meetings. 

Special  meetings  of  the  Board  of  Directors  may  be  held  at  any  time 
in  the  office  of  the  Company,  in  the  City  of  New  York,  on  the  written 
call  of  the  President  or  of  any  three  members  of  the  Board.  Special 
meetings  may  be  held  at  any  time  and  place  within  the  State,  and  with- 
out notice,  by  unanimous  consent  of  the  Board. 

SEC.  6.    Notice  of  Meetings. 

The  Secretary  shall  notify  each  member  of  the  Board  of  all  regular 
or  special  meetings,  by  mailing  to  each  member's  last  known  post-office 
address,  postage  prepaid,  at  least  five  days  before  any  such  meeting,  a 
written  or  printed  notice  thereof,  giving  the  time,  place,  and,  in  case  of 
special  meetings,  the  objects  thereof;  and  no  other  business  shall  be 
considered  at  any  such  meeting  than  shall  have  been  so  notified  to  the 
members.  Any  failure  or  irregularity  in  notice  of  a  regular  meeting 
shall  not  affect  the  validity  of  such  meeting,  or  of  the  proceedings 
thereat. 

SEC.  7.    Quorum. 

A  majority  of  the  Board  of  Directors  shall  constitute  a  quorum,  and 
a  majority  vote  of  the  members  in  attendance  at  any  Board  meeting 
shall,  in  the  presence  of  a  quorum,  decide  its  action.  A  minority  of  the 
Board  present  at  any  regular  or  special  meeting  may,  in  the  absence  of 
a  quorum,  adjourn  to  a  later  date,  but  may  not  transact  any  business 
until  a  quorum  has  been  secured. 

SEC.  8.    Election  of  Officers. 

At  the  first  meeting  of  the  Board  of  Directors  after  the  election  of 
directors  each  year,  a  President,  Vice-President,  Secretary,  Treasurer, 
General  Manager,  and  Counsel,  shall  be  elected  to  serve  for  the  ensuing 
year  and  until  the  election  of  their  respective  successors.  Election  shall 
be  by  ballot,  and  a  majority  of  the  votes  cast  shall  be  necessary  to  elect. 


ORGANIZATION.       FORMS. 


If  not  detrimental  to  the  business  or  operations  of  the  Company,  any  two 
offices  may  be  conferred  upon  one  person.  The  directors  shall  fix  the 
compensation  of  officers,  subject  to  the  limitations  of  the  Charter  and 
the  By-Laws.  Any  vacancies  that  occur  may  be  filled  by  the  Board  for 
the  unexpired  term.  The  Board  shall  have  the  right  to  remove  any 
officer  by  a  two-thirds  vote  of  the  entire  membership  of  the  Board. 

SEC.  g.     Compensation  of  Directors. 

Each  director  shall  receive  the  sum  of  five  dollars  as  compensation 
for  his  attendance  at  any  regular  or  special  meeting  of  the  Board  of 
Directors,  and  shall  receive  no  other  salary  or  compensation  for  his 
services  as  a  director  of  the  Company. 

SEC.  10.    Power  to  Pass  By-Lazvs. 

The  Board  of  Directors  shall  have  no  power  to  amend,,  alter  or  re- 
peal the  by-laws,  but  may  pass  such  additional  by-laws  in  conformity  there- 
with as  may  be  necessary  or  convenient  to  facilitate  the  business  of  the 
Company. 

SEC    II.     Executive  Committee. 

The  President,  Vice-President  and  Treasurer  shall  together  consti- 
tute an  Executive  Committee  which  shall  be  a  part  of  the  permanent 
executive  organization  of  the  Company,  and  shall,  in  the  interim  between 
meetings  of  the  Board  of  Directors,  exercise  all  the  powers  of  that  body 
in  accordance  with  the  general  policy  of  the  Company  and  the  directions 
of  the  Board. 

Meetings  of  the  Executive  Committee  shall  be  held  on  call  of  the 
President,  or  of  any  two  members  of  the  Committee.  All  of  the  mem- 
bers of  the  Committee  must  be  duly  notified  of  meetings,  and  a  majority 
of  the  members  shall  constitute  a  quorum.  The  Executive  Committee 
shall  keep  due  record  of  all  meetings  and  actions  of  the  Committee,  and 
such  records  shall  at  all  times  be  open  to  the  inspection  of  any  director. 

SEC.  12.     Corporation  Offices. 

The  principal  office  of  the  Company,  within  the  State  of  New  York, 
shall  be  at  52  Broadway,  New  York  City,  and  such  other  offices  for  the 
transaction  of  its  business  shall  be  maintained  at  such  other  places,  in 
or  outside  of  said  State,  as  may  be  determined  upon  by  the  Board  of 
Directors. 

SEC.  13.     Order  of  Business. 

The  regular  order  of  business  at  meetings  of  the  Board  of  Directors 
shall  be  as  follows  : 

1.  Reading  and  disposal  of  any  unapproved  Minutes. 

2.  Reports  of  Officers  and  Committees. 

3.  Unfinished  Business. 

4.  New  Business. 

5.  Adjournment. 

ARTICLE  IV.  —  OFFICERS. 

SEC.  i.     Enumeration,  Election  and  Qualifications. 

The  officers  of  the  Company  shall  be  a  President,  Vice-President, 
Treasurer,  Secretary,  General  Manager,  and  Counsel.  These  officers  shall 
be  elected  by  the  Board  of  Directors  at  the  first  regular  meeting  after  the 


196 


NEW    YORK    CORPORATIONS. 


election  of  directors  each  year,  and  shall  hold  office  for  the  term  of  one 
year,  and  until  their  respective  successors  are  duly  elected  and  qualify. 
The  President  and  Vice-President  shall  be  elected  from  among  the  Board 
of  Directors. 

SEC.  2.     The  President. 

The  President,  when  present,  shall  preside  at  all  meetings  of  the 
stockholders  and  of  the  Board  of  Directors ;  shall  sign  all  certificates  of 
stock ;  shall  sign  or  countersign,  as  may  be  necessary,  all  such  bills,  notes, 
checks,  contracts  and  other  instruments  as  may  pertain  to  the  ordinary 
course  of  the  Company's  business ;  and  sign,  when  duly  authorized  there- 
to, all  contracts,  orders,  deeds,  liens,  licenses  and  other  instruments  of  a 
special  nature. 

He  may  also,  in  the  absence  or  disability  of  the  Treasurer,  endorse 
checks,  drafts  and  other  negotiable  instruments  for  deposit  or  collection, 
and  shall,  with  the  Secretary,  sign  the  minutes  of  all  meetings  over  which 
he  may  have  presided. 

At  the  first  regular  meeting  of  the  Board  in  January  he  shall  sub- 
mit a  complete  report  of  the  operations  of  the  Company  for  the  preced- 
ing year,  together  with  a  statement  of  the  Company  affairs  as  existing 
at  the  close  of  such  year,  and  shall  submit  a  similar  report  at  the  annual 
meeting  of  stockholders ;  also,  he  shall  report  to  the  Board  of  Directors, 
from  time  to  time,  all  such  matters  coming  within  his  notice  and  relat- 
ing to  the  interests  of  the  Company,  as  should  be  brought  to  the  atten- 
tion of  the  Board. 

He  shall  be,  ex-officio,  a  member  of  all  standing  committees,  shall 
have  such  usual  powers  of  supervision  and  management  as  may  pertain 
to  the  office  of  President,  and  perform  such  other  duties  as  may  be 
properly  required  of  him  by  the  Board  of  Directors. 

SEC.  3.     The  Vice-President. 

The  Vice-President  shall  familiarize  himself  with  the  affairs  of  the 
Company,  and,  in  the  absence,  disability  or  refusal  to  act  of  the  President, 
shall  possess  all  of  the  powers  and  perform  all  of  the  duties  of  that 
officer. 

SEC.  4.     The  Secretary. 

The  Secretary  shall  keep  full  minutes  of  all  meetings  of  the  stock- 
holders and  of  the  Board  of  Directors ;  shall  read  such  minutes  at  the 
proper  subsequent  meetings;  shall  issue  all  calls  for  meetings  and  notify 
all  officers  and  directors  of  their  election ;  shall  have  charge  of,  and 
keep,  the  seal  of  the  corporation,  and  affix  the  same  to  certificates  of 
stock  when  such  certificates  are  signed  by  the  President  and  Treasurer, 
and  shall  affix  the  seal,  attested  by  his  signature,  to  such  other  instru- 
ments as  may  require  the  same. 

He  shall  keep  the  stock  certificate  book  and  the  other  usual  corpora- 
tion books,  and  shall  prepare,  record,  transfer,  issue,  seal  and  cancel  cer- 
tificates of  stock  as  required  by  the  transactions  of  the  Company  and  its 
stockholders.  He  shall  also  sign,  with  the  President,  all  contracts,  deeds, 
licenses  and  other  instruments  when  so  ordered. 

He  shall  make  such  reports  to  the  Board  of  Directors  as  they  may 
request,  and  shall  also  prepare  such  reports  and  statements  as  are  re- 
quired by  the  State  laws.  .  He  shall  make  out,  twenty  days  before  any 
election  of  directors,  a  complete  list  of  the  stockholders  entitled  to  vote 
at  such  election,  arranged  in  alphabetical  order,  and  giving  the  number 
of  shares  of  stock  that  may  be  voted  by  each,  and  shall  keep  the  same 
open  to  inspection  at  the  office  of  the  Company  until  the  time  of,  and 


ORGANIZATION.      FORMS. 

during  the  said  election.  He  shall  allow  any  stockholder,  on  application 
in  business  hours,  to  inspect  the  stock  certificate  book,  the  stock  transfer 
book  and  the  stock  ledger. 

He  shall  attend  to  such  correspondence,  and  to  such  other  duties,  as 
may  be  incidental  to  his  office,  or  properly  be  assigned  him  by  the  Board. 

He  shall  receive  such  salary,  not  exceeding  twelve  hundred  dollars 
per  annum,  as  may  be  fixed  by  the  Board  of  Directors. 

SEC.  5.     The  Treasurer. 

The  Treasurer  shall  have  the  custody  of,  and  be  responsible  for  all 
moneys  and  securities  of  the  Company;  shall  keep  full  and  accurate 
records  and  accounts  in  books  belonging  to  the  Company,  showing  the 
transactions  of  the  Company,  its  accounts,  liabilities  and  financial  condi- 
tion, and  shall  see  that  all  expenditures  are  duly  authorized  and  are  evi- 
denced by  proper  receipts  and  vouchers.  He  shall  deposit  in  the  name  of 
the  Company,  in  such  depositary  or  depositaries  as  are  designated  by  the 
Directors,  all  moneys  that  may  come  into  his  hands  for  the  Company 
account.  His  books  and  accounts  shall  be  open  at  all  times  during  busi- 
ness hours  to  the  inspection  of  any  director  of  the  Company. 

The  Treasurer  shall  also  endorse  for  collection  or  deposit  all  bills, 
notes,  checks  and  other  negotiable  instruments  of  the  Company;  shall 
pay  out  money  as  may  be  necessary  in  the  transactions  of  the  Company, 
either  by  special  or  general  direction  of  the  Board  of  Directors,  and  on 
checks  signed  by  the  President  and  himself,  and  shall  generally,  to- 
gether with  the  President,  have  supervision  of  the  finances  of  the  Com- 
pany. 

He  shall  also  make  a  full  report  of  the  financial  condition  of  the 
Company  for  the  annual  meeting  of  the  stockholders,  and  shall  make  such 
other  reports  and  statements  as  may  be  required  of  him  by  the  Board  of 
Directors  or  by  the  laws  of  the  State. 

He  shall  give  bond  in  the  sum  of  five  thousand  dollars,  with  sureties 
satisfactory  to  the  Board  of  Directors,  for  the  faithful  performance  of 
his  duties  and  for  the  restoration  to  the  Company  in  event  of  his  death, 
resignation  or  removal  from  office,  of  all  books,  papers,  vouchers,  money 
and  other  property  belonging  to  the  Company  that  may  have  come  into 
his  custody.  He  shall  receive  such  compensation,  not  exceeding  eighteen 
hundred  dollars  per  annum,  as  may  be  fixed  by  the  Board  of  Directors. 

SEC.  6.     The  General  Manager. 

The  General  Manager  shall,  under  the  supervision  of  the  Board  of 
Directors  and  the  President,  have  charge  of  and  manage  the  active  busi- 
ness operations  of  the  Company.  He  shall  perform  such  further  duties 
and  make  such  reports  as  may  be  required  of  him  by  the  Board  of  Direc- 
tors, and  shall  receive  such  salary,  not  exceeding  twenty-four  hundred 
dollars  per  annum,  as  may  be  fixed  by  the  Board. 

SEC.  7.     Counsel. 

Counsel  of  the  Company  shall  prepare  all  such  contracts  and  agree- 
ments required  in  the  business  of  the  Company  as  may  be  referred  to  him 
by  its  officers ;  and  shall  inspect  and  pass  upon  all  such  instruments  pre- 
sented to  the  Company  as  may  be  of  sufficient  importance  to  justify  such 
examination ;  also  he  shall  advise  with  the  officers  of  the  Company  in 
all  such  legal  matters  pertaining  to  the  affairs  of  the  Company  as  may  re- 
quire his  consideration.  He  shall  receive  such  annual  retainer,  not  ex- 
ceeding six  hundred  dollars  per  annum,  as  may  be  fixed  by  the  Board  of 
Directors. 


198  NEW    YORK    CORPORATIONS. 

ARTICLE  V. — DIVIDENDS  AND  FINANCES. 

SEC.  i.    Dividends. 

Dividends  shall  be  declared  at  such  times  as  the  Board  may  direct, 
but  no  dividend  shall  be  declared  or  paid,  save  from  surplus  profits  re- 
maining after  all  current  liabilities  of  the  Company  have  been  fully  paid; 
nor  shall  any  dividend  be  declared  that  would  impair  the  capital  of  the 
Company. 

SEC.  2.     Reserve  Fund. 

No  dividend  to  exceed  six  per  cent,  per  annum  shall  be  declared  by 
the  Board  of  Directors  until  there  shall  have  been  accumulated  from 
surplus  profits  a  reserve  fund  of  ten  thousand  dollars,  such  fund  to  be 
used  for  the  extension  or  enlargement  of  the  business  of  the  Company 
and  the  betterment  of  its  plant,  or  for  such  other  purposes  as  may  be 
necessary  or  advisable. 

SEC.  3.    Debt. 

No  debts  shall  be  contracted,  nor  liability  incurred,  nor  contract 
made  by  or  on  behalf  of  this  Company  in  excess  of  one  thousand  dollars, 
unless  the  same  be  authorized  or  directed  by  the  By-Laws  or  by  a  duly 
recorded  two-thirds  vote  of  the  entire  Board  of  Directors  at  a  regular 
meeting,  or  at  a  special  meeting  called  for  the  purpose. 

SEC.  4.     Bank  Deposits. 

The  Treasurer  shall  deposit  the  moneys  of  the  Company  as  the  same 
may  come  into  his  hands,  in  such  depositary  or  depositaries  as  may  be 
designated  by  the  Board  of  Directors,  and  such  deposits  shall  be  made 
in  the  name  of  the  Company,  and  moneys  shall  be  withdrawn  therefrom 
only  by  check  signed  by  the  Treasurer  and  countersigned  by  the  Presi- 
dent. 

ARTICLE  VI. — SUNDRY  PROVISIONS. 

SEC.  i.    Corporate  Seal. 

The  corporate  seal  of  the  Company  shall  consist  of  two  concentric 
circles,  between  which  shall  be  the  name  of  the  Company,  and  in  the 
centre  shall  be  inscribed  "Incorporated  1906,  New  York,"  and  such  seal, 
at>  impressed  on  the  margin  hereof,  is  hereby  adopted  as  the  corporate 
seal  of  the  Company. 

SEC.  2.    Penalties. 

Any  officer,  director  or  stockholder  who  shall  disobey  or  violate  any 
of  the  provisions  of  these  by-laws  may  be  fined  in  an  amount  not  to 
exceed  twenty  dollars,  such  fine  to  be  imposed  by  the  Board  of  Directors, 
and,  if  not  paid  at  the  time,  to  be  deducted  from  any  salary  or  dividend 
then  due  or  that  may  thereafter  become  due  said  person. 

SEC.  3.    Amendment. 

These  by-laws  may  be  amended,  repealed  or  altered,  in  whole  or  in 
part,  at  any  regular  meeting  of  the  stockholders,  or  at  any  special  meet- 
ing where  such  action  has  been  duly  announced  in  the  call,  provided  that 
a  majority  of  the  entire  voting  stock  of  the  Company  shall  vote  for  such 
amendment,  repeal  or  alteration. 


ORGANIZATION.       FORMS.  199 

The  Board  of  Directors  shall  have  no  power  to  amend,  alter  or  re- 
peal the  by-laws,  but  may  pass  such  additional  by-laws  in  conformity 
therewith  as  may  be  necessary  or  convenient  to  facilitate  the  business  of 
the  Company. 


Under  the  New  York  statutes  the  inspectors  for  the  first 
election  of  directors  must  be  appointed  by  the  board  of  direc- 
tors designated  in  the  charter.  (S.  C.  L.,  §  28.) 

Form  8.     Certification  of  By-Laws. 


We,  the  undersigned,  being  the  duly  elected  President  and  Secretary 
of  the  Leighton  Coal  Company,  a  corporation  organized  under  the  Laws 
of  the  State  of  New  York,  do  hereby  certify  that  the  foregoing  By-Laws 
are  the  By-Laws  of  the  said  Corporation  duly  adopted  by  the  stock- 
holders of  said  Corporation  at  their  first  meeting,  held  on  the  second  day 
of  January,  1906,  in  the  Office  of  the  said  Corporation,  No.  52  Broadway, 
New  York,  as  shown  by  the  Minutes  of  said  meeting. 

In  Testimony  Whereof,  we  have  hereunto  affixed  our  official 
signatures  and  the  corporate  seal  of  said  corporation,  this 
eighteenth  day  of  January,  1906. 

THOMAS  HARDY, 

President. 
WINSTON  HARRISON, 

Secretary. 

j  CORPORATE  { 
(         SEAL.        ) 


CHAPTER  XIX. 
FORMS  FOR  FIRST  MEETINGS. 

(See  Chap.  V,  First  Meetings.) 


Form  9.     Proxy. 


PROXY 

FOR 
FIRST  STOCKHOLDERS'  MEETING. 


Know  All  Men  by  These  Presents, 

That  I,  the  undersigned,  one  of  the  incorporators  and  a  subscriber  to 
the  stock  of  the  New  York  Excavating  Company,  do  hereby  constitute 
and  appoint  John  H.  Williams  my  true  and  lawful  attorney,  with  full 
powers  of  substitution  and  revocation,  to  represent  me  at  the  first  meet- 
ing of  the  stockholders  of  said  corporation  to  be  held  on  the  ninth  day 
of  February,  1906,  and  at  any  meeting  postponed  or  adjourned  therefrom, 
hereby  granting  my  said  attorney  full  power  and  authority  to  act  for 
me  at  said  meeting,  and,  in  my  name,  place  and  stead,  to  vote  thereat 
upon  the  stock  of  said  corporation  subscribed  for  by  me,  or  upon  which 
I  may  then  be  entitled  to  vote,  in  the  transaction  of  any  and  all  business 
pertaining  to  the  affairs  of  the  Company  that  may  be  brought  before  said 
meeting,  all  as  fully  as  I  might  or  could  do  if  personally  present,  and  I 
hereby  ratify  and  confirm  all  that  my  said  attorney,  or  his  substitute, 
shall  lawfully  do  at  such  meeting  in  my  name,  place  and  stead. 

IN  WITNESS  WHEREOF,  I  have  hereunto  affixed  my  signature  and 
seal,  this  twenty-second  day  of  January,  1906. 

In  presence  of  HENRY  W.  JAMISON.     [L.  s.] 

WALTER  T.  HENDERSON. 

(See  Forms  26,  27.) 

Proxies  must  be   in   writing,   be  signed  by  the  stock- 
holder or  his  authorized  attorney,  and  should  be  witnessed  by 

200 


FORMS   FOR  FIRST   MEETINGS.  2OI 

at  least  one  person,  but  do  not  ordinarily  require  acknowledg- 
ment. The  proxy  given  is  formal  and  complete.  It  is  valid 
for  the  first  meeting  and  any  meetings  adjourned  therefrom, 
but  then  expires  without  revocation.  (See  §  104.) 

Form  10.     Call  and  Waiver.     Stockholders'. 

CALL  AND  WAIVER  OF  NOTICE 

FOR 
FIRST  MEETING  OF  STOCKHOLDERS 

OF  THE 

AUTOMATIC  APPLIANCE  COMPANY. 


WE,  THE  UNDERSIGNED,  being  all  of  the  incorporators  of  the  Automatic 
Appliance  Company  and  all  the  subscribers  to  its  capital  stock  entitled  to 
notice  of  said  meeting,  do  hereby  call  the  first  meeting  of  the  stock- 
holders of  said  corporation  to  be  held  in  the  office  of  Wilton  &  Clough, 
170  Broadway,  New  York,  at  10  a.  m.,  on  the  tenth  day  of  January,  1906, 
for  the  purpose  of  receiving  charter,  adopting  by-laws,  considering  and 
acting  upon  a  proposal  for  the  issue  of  the  capital  stock  of  the  corpora- 
tion in  exchange  for  property,  and  the  transaction  of  all  such  other  busi- 
ness as  may  be  necessary  or  convenient  in  connection  with  the"  organiza- 
tion of  said  corporation,  and  we  do  hereby  waive  all  requirements  as  to 
notice  or  publication  of  the  time,  place  and  purposes  of  this  first  meet- 
ing and  do  consent  to  the  transaction  thereat  of  any  and  all  business 
pertaining  to  the  affairs  of  the  Company. 

Dated,  New  York  City,  FRANCIS  JOHNSON. 

January  10.  1906.  WILLIS  T.   HARRIMAN. 

JOHN  M.  SILLIMAN. 
FRANK  W.  JONES. 
HARRISON  FREEMAN. 


In  New  York,  since  the  first  board  of  directors  is  desig- 
nated by  the  charter  and  this  board  has  power  to  adopt  by- 
laws, the  first  meeting  of  stockholders  loses  much  of  the  im- 
portance it  has  in  other  states,  and  is  sometimes  omitted  en- 
tirely. It  is,  however,  usually  held  and  this  initial  meeting 
of  the  stockholders  is  most  conveniently  assembled  by  means 
of  a  call  and  waiver  of  notice  similar  to  the  foregoing.  This, 


2O2  NEW    YORK    CORPORATIONS. 

if  signed  by  all  the  parties  concerned,  is  all-sufficient,  and 
saves  the  time  and  trouble  involved  in  personal  notification 
or  notice  by  publication.  If,  however,  any  person  or  persons 
entitled  to  be  present  at  such  a  meeting,  should  not  sign,  such 
omission  might  invalidate  the  proceedings  of  the  whole  meet- 
ing. (See  §§  41,  loia.) 

Form  ii.     Call  and  Waiver.     Directors'. 


CALL  AND  WAIVER  OF  NOTICE 

FOR 

FIRST  MEETING  OF  DIRECTORS 

OF  THE 

AUTOMATIC  APPLIANCE  COMPANY. 


WE,  THE  UNDERSIGNED,  being  all  of  the  Directors  of  the  Automatic 
Appliance  Company,  do  hereby  call  the  first  meeting  of  the  Board  of 
Directors  thereof,  to  be  held  in  the  office  of  Wilton  &  Clough,  170  Broad- 
way, New  York  City,  at  11  a.  m.,  on  the  tenth  day  of  January,  1906,  for 
the  purpose  of  electing  officers,  acting  upon  a  proposal  to  exchange  prop- 
erty for  the  capital  stock  of  the  Company  and  for  the  transaction  of  all 
such  other  business  as  may  be  necessary  or  convenient  in  connection  with 
the  organization  of  said  corporation  and"  the  promotion  of  its  business,  and 
we  dp  hereby  waive  all  statutory  and  by-law  requirements  as  to  notice  of 
the  time,  place  and  purposes  of  said  meeting  and  do  consent  to  the  trans- 
action thereat  of  any  and  all  business  pertaining  to  the  affairs  of  the 
Company. 

Dated,  New  York  City,  HARRISON  FREEMAN. 

January  10,  1906.  FRANK  W.  JONES. 

WILLIAM  JASPER. 

HENRY  M.  FRENCKEL. 

FRANCIS  JOHNSON. 


As  in  the  case  of  the  first  stockholders'  meeting,  the 
first  meeting  of  directors  is  most  conveniently  assembled  by 
means  of  the  call  and  waiver.  This  must  be  signed  by  every 
member  of  the  board,  and,  as  in  the  call  for  any  other  special 
meeting,  should  specify  the  business  to  be  transacted.  (See 


FORMS   FOR   FIRST    MEETINGS.  2O3 

Form  12.     Exchange  of  Property  for  Stock.     Proposal. 


To  the  Automatic  Appliance  Company, 
New  York  City. 

GENTLEMEN  : — I  hereby  offer  your  Company  in  exchange  and  full 
payment  for  its  entire  capital  stock  of  the  par  value  of  Thirty  Thousand 
Dollars  ($30,000),  the  stock  subscribed  for  by  the  incorporators  being 
included  with  their  consent,  the  business  now  conducted  under  the  firm 
name  of  Henry  W.  McCabe  &  Co.,  at  Nos.  167-9  Centre  St.,  New  York 
City,  for  the  manufacture  of  gas  and  electric  fixtures,  including  there- 
with the  plant,  lease  of  the  premises  and  the  firm  property  now  therein, 
consisting  of  the  stock  on  hand  and  in  process  of  manufacture,  raw  ma- 
terial, tools,  machinery,  supplies  and  apparatus  of  every  description,  to- 
gether with  the  cash  on  hand  and  in  bank  now  amounting  to  $1,150.35, 
all  bills  and  accounts  receivable  and  the  right  to  own  and  use  the  pres- 
ent firm  name  and  all  trade  marks,  formulae,  secret  processes,  patents  and 
good-will  of  the  present  business ;  your  Company  to  take  over  the  busi- 
ness as  a  going  concern  and  to  assume  all  outstanding  contracts  and  all 
bills  and  obligations  of  every  kind,  the  amount  of  such  bills  and  obliga- 
tions being  guaranteed  not  to  exceed  $1,200. 

If  this  proposition  is  accepted,  the  stock  subscribed  for  by  the  incor- 
porators is  to  be  issued  to  them,  and  the  remainder  of  the  stock  is  to  be 
issued  to  my  order,  all  to  be  full-paid  and  non-assessable,  against  the 
delivery  of  all  such  instruments  of  assignment  and  conveyance  as  may 
be  necessary  to  vest  the  full  title  to  the  aforementioned  business  and 
property  in  your  Company. 

Dated,  New  York,  Yours  very  truly, 

January  10,  1906.  HENRY  W.  McCABE. 


This  proposal  offers  a  simple  and  convenient  method  of 
bringing  the  matter  of  issuing  stock  for  property  before  the 
meetings  of  stockholders  and  directors.  Such  a  proposal, 
when  followed  by  resolutions  of  the  stockholders  approving 
it,  and  resolutions  of  the  directors  accepting  it,  constitutes  a 
complete  contract.  The  minutes  of  the  respective  meetings 
of  the  stockholders  and  directors  should  give  complete  and 
accurate  records  of  the  proceedings  in  connection  with  the 
exchange  of  stock  for  property.  The  forms  of  resolutions 
which  follow  might  be  appropriately  adopted  by  the  stock- 
holders and  directors  respectively,  if  the  proposal  is  to  be 
accepted. 


204  NEW    YORK    CORPORATIONS. 

Form  13.     Exchange  of  Property  for  Stock.     Stockholders' 
Resolution. 


Whereas,  A  proposition  has  been  received  from  Mr.  Henry  W. 
McCabe,  offering  to  sell,  assign  and  convey  to  this  Company  the  plant, 
lease,  property  and  business  of  Henry  W.  McCabe  &  Co.,  as  a  going  con- 
cern, in  exchange  for  the  entire  capital  stock  of  this  Company;  and 

Whereas,  It  appears  to  the  stockholders  of  this  Company  that  the 
said  property  and  business  are  desirable  for  the  purposes  of  the  Com- 
pany and  are  reasonably  worth  the  purchase  price  thereof. 

Now  Therefore  Be  It  Resolved,  That  the  said  proposition  for  the 
exchange  of  said  property  and  business  for  the  entire  capital  stock  of 
this  Company,  as  set  forth  in  said  proposition,  be  and  hereby  is  approved, 
and  the  Board  of  Directors  of  this  Company  are  hereby  authorized, 
empowered  and  instructed  to  accept  the  said  proposition  and  to  cause  the 
entire  capital  stock  of  the  Company  to  be  issued  for  the  said  property 
and  business,  in  accordance  with  its  terms. 


(See  §  46.) 

Form  14.      Exchange  of  Property  for  Stock.      Directors' 
Resolution. 


Whereas,  The  property  offered  in  exchange  for  the  Capital  Stock  of 
this  Company  by  Mr.  Henry  W.  McCabe  in  his  proposition  to  the  Com- 
pany is  adjudged  by  this  Board  to  be  of  the  reasonable  value  of  Thirty 
Thousand  Dollars  ($30,000),  and  to  be  necessary  for  the  use  and  lawful 
purposes  of  the  Company. 

Resolved,  That  the  said  property  and  business  be  and  hereby  are,  in 
accordance  with  the  authorization  and  instructions  of  the  stockholders 
of  this  Company,  accepted  in  full  payment  for  the  said  capital  stock  of 
the  Company,  in  accordance  with  the  terms  of  said  proposition ;  and  the 
proper  officers  of  this  Company  are  hereby  authorized  and  directed  to 
receive  the  duly  executed  transfers  and  assignments  of  the  property  and 
business  specified  in  said  proposition  and  to  issue  in  exchange  therefor 
the  entire  stock  of  the  Company,  all  full-paid  and  non-assessable,  to  such 
person  or  persons  as  may  be  designated  by  the  written  orders  of  the 
aforementioned  Henry  W.  McCabe,  except  as  to  the  shares  subscribed 
for  by  the  incorporators,  which  shall  be  issued  to  them  or  their  order. 


It  is  to  be  noted  that  the  decisive  action  is  taken  by  the 
directors  in  the  foregoing  resolution,  and  that  the  stock- 
holders' resolution  merely  approves  the  transaction  and  au- 
thorizes the  directors  to  take  action.  This  authorization, 


FORMS   FOR  FIRST   MEETINGS.  205 

though  usual  and  advisable  as  a  precautionary  measure,  is  not 
essential,  the  directors  having  full  power  to  act  without  the 
stockholders'  concurrence.  (See  §  50.) 

Form  15.     Minutes.     Stockholders.' 


MINUTES  OF  FIRST  MEETING  OF  STOCKHOLDERS 

OF  THE 
AUTOMATIC   APPLIANCE   COMPANY. 


Held  January  10,  1906. 


Pursuant  to  written  call  and  waiver  of  notice,  the  first  meeting  of 
stockholders  of  the  Automatic  Appliance  Company  was  held  in  the  office 
of  Wilton  &  Clough,  170  Broadway,  New  York  City,  at  10  a.  m.,  on  the 
tenth  day  of  January,  1906,  with  all  the  stockholders  present,  either  in 
person  or  by  proxy. 

Mr.  Harrison  Freeman  was  chosen  Chairman  and  called  the  meet- 
ing to  order.  Mr.  Frank  W.  Jones  was  appointed  Secretary  of  the  meet- 
ing. 

The  following  stockholders  were  present  in  person : 

SHARES 
NAME.  SUBSCRIBED. 

Harrison  Freeman  i 

Frank  W.  Jones  i 

Willis  T.  Harriman    i 

The  following  stockholders  were  present  by  proxies  duly  presented 
and  filed  with  the  Secretary: 

SHARES 
NAME.  NAME  OF  PROXY.  SUBSCRIBED. 

John  M.  Silliman  Frank   McPherson    I 

Francis  Johnson   Samuel  Weldon   I 

The  Secretary  presented  the  call  and  waiver  of  notice,  pursuant  to 
which  the  meeting  was  held,  duly  signed  by  all  the  incorporators  of  the 
Company.  Said  call  and  waiver  was  ordered  spread  upon  the  minutes 
and  is  as  follows : 

(See  Call  and  Waiver,  Form  10.) 

The  Chairman  then  presented  a  copy  of  the  Certificate  of  Incorpora- 
tion of  the  Company  and  stated  that  said  certificate  had  been  filed  with 
the  Secretary  of  State  and  recorded  by  him  on  the  sixth  day  of  January, 
1906,  and  that  a  duplicate  copy  had  been  filed  for  record  with  the  County 
Clerk  on  the  eighth  day  of  January,  1906. 


2O6  NEW   YORK    CORPORATIONS. 

Upon  motion,  duly  made  and  carried,  said  Certificate  of  Incorpora- 
tion was  ordered  received,  the  Directors  named  therein  were  recognized 
as  the  Directors  of  the  Company,  and  the  Secretary  was  instructed  to 
spread  the  said  Certificate  in  full  upon  the  first  pages  of  the  Book  of 
Minutes. 

The  Chairman  also  presented  a  form  of  by-laws,  which  was  read  and 
adopted,  article  by  article,  and,  as  a  whole,  unanimously  adopted  as  the 
by-laws  of  the  Company,  and  ordered  entered  in  the  Minute  Book  im- 
mediately succeeding  the  Certificate  of  Incorporation. 

The  Secretary  then  presented  a  written  proposal  from  Mr.  Henry  W. 
McCabe,  of  Nos.  167-9  Centre  St.,  New  York  City,  offering  to  transfer 
and  assign  to  the  Company  certain  property  and  business,  as  set  forth 
in  said  proposal  in  exchange  for  the  entire  capital  stock  of  the  Com- 
pany. 

After  due  consideration  said  proposal  was  ordered  received  and  the 
following  resolution  in  regard  thereto  was  moved,  seconded  and  passed 
by  unanimous  vote : 

(See  Stockholders'  Resolution,  Form  13.) 

There  being  no  further  business  before  the  meeting,  it  was  ad- 
journed. 

FRANK  W.  JONES, 

HARRISON  FREEMAN,  Secretary. 

Chairman. 


The  proposal  for  exchange  of  property  for  stock  might 
have  been  entered  in  full  in  the  minutes  of  this  first  meeting 
of  stockholders,  and,  if  so,  would  have  appeared  just  after 
the  paragraph  descriptive  of  the  proposition  and  its  presenta- 
tion by  the  secretary.  It  would  be  prefaced  by  the  following 
statement : 

"Said  proposition  was  ordered  received  and  spread 
upon  the  minutes  and  is  as  follows."  (See  Form  12, 
"Exchange  of  Property  for  Stock.  Proposal.") 

Inasmuch,  however,  as  the  proposition  should  properly 
appear  in  the  minutes  of  the  directors'  meeting  where  it  is 
formally  acted  upon,  it  is  better  omitted  from  the  stockholders' 
minutes  unless  there  is  some  special  reason  for  its  inclusion. 


FORMS   FOR  FIRST   MEETINGS.  2O7 

Form  16.     Minutes.     Directors'. 

MINUTES  OF  THE  FIRST  MEETING  OF  DIRECTORS 

OF  THE 
AUTOMATIC   APPLIANCE   COMPANY. 


Held  January  10,  1906. 


Pursuant  to  written  call  and  waiver  of  notice,  the  Board  of  Directors 
of  the  Automatic  Appliance  Company  held  its  first  meeting  in  the  office 
of  Wilton  &  Clough,  170  Broadway,  New  York  City,  at  n  a.  m.,  on  the 
tenth  day  of  January,  1906. 

Mr.  Harrison  Freeman  was  chosen  as  temporary  Chairman  and 
Mr.  Frank  W.  Jones  was  appointed  temporary  Secretary  of  the  meeting. 

All  the  members  of  the  Board  were  present  as  follows : 

Harrison  Freeman. 
Frank  W.  Jones. 
William  Jasper. 
Henry   M.   Frenckel. 
Francis  Johnson. 

On  request  of  the  Chairman,  the  Secretary  presented  the  Call  and 
Waiver  of  Notice,  pursuant  to  which  the  meeting  was  held,  duly  signed 
by  all  the  members  of  the  Board.  It  was  ordered  spread  upon  the  min- 
utes and  is  as  follows : 

(See  Call  and  Waiver,  Form  n.) 

The  Chairman  then  appointed  Messrs.  William  Jasper  and  Frank  W. 
Jones,  tellers  to  conduct  the  election  for  officers  of  the  Company,  the 
officers  so  elected  to  serve  for  the  remainder  of  the  corporate  year  and 
until  the  election  of  their  successors. 

The  votes  of  those  present  were  then  duly  cast  by  ballot,  resulting 
in  the  election  by  unanimous  vote  of  the  following  officers : 

President Harrison  Freeman. 

Vice-President Francis  Johnson. 

Secretary  and  Treasurer Frank  W.  Jones. 

The  permanent  officers  of  the  Company  thereupon  took  charge  of 
the  meeting. 

By  motion,  duly  seconded  and  passed,  the  amount  of  the  Treasurer's 
bond  was  fixed  at  $10,000,  such  bond  to  be  in  form  and  with  sureties 
approved  by  the  Board. 

The  Treasurer-elect  then  presented  a  bond  for  said  amount  signed 
by  himself  as  principal,  and  by  Harry  D.  Ogden  and  W.  G.  Young  as 
sureties.  The  form  of  the  instrument  and  the  sureties  thereon  meeting 
with  the  approval  of  the  Board,  the  bond  as  presented  was  formally  ac- 
cepted and  placed  in  custody  of  the  President. 


2O8  NEW    YORK    CORPORATIONS. 

The  Secretary  presented  a  form  of  stock  certificate  for  approval, 
which  was  by  motion  adopted  as  the  form  for  the  stock  certificates  of 
the  Company,  and  the  Secretary  was  instructed  to  spread  the  said  form 
upon  the  pages  of  the  Minute  Book  immediately  following  the  record 
of  the  meeting  then  in  progress. 

The  President  then  presented  a  written  proposal  from  Mr.  Henry  W. 
McCabe,  of  Nos.  167-9  Centre  St,  New  York  City,  offering  to  assign  to 
the  Company,  in  exchange  for  its  entire  Capital  Stock,  certain  specified 
property  and  business.  The  said  proposal  was  ordered  spread  in  full 
upon  the  minutes  and  is  as  follows : 

(See  Form  12.) 

The  President  also  presented  a  resolution  of  the  stockholders,  ap- 
proving the  said  proposal  and  authorizing  and  instructing  the  Directors 
to  accept  the  same  and  to  take  such  action  in  regard  thereto  as  might  be 
necessary  to  make  such  acceptance  fully  effective. 

The  following  resolution  was  thereupon  moved,  seconded  and  unani- 
mously adopted : 

(See  Directors'  Resolution,  Form  14.) 

Upon  motion  duly  made,  seconded,  and  passed,  the  following  resolu- 
tion was  adopted: 

Resolved,  That  the  Treasurer  be  and  hereby  is  authorized  and  in- 
structed to  open  an  account  for  the  Company  with  the  Mercantile  National 
Bank  of  New  York  City,  and  to  deposit  therein  all  the  funds  of  the  Com- 
pany coming  into  his  custody;  such  account  to  be  in  the  name  of  the 
Company  and  funds  deposited  therein  to  be  withdrawn  only  by  check 
signed  by  the  Treasurer  and  countersigned  by  the  President. 

The  following  motions  were  then  made,  seconded  and  duly  passed 
by  the  unanimous  vote  of  all  present : 

Moved,  That  the  President  be  hereby  authorized  to  lease  for  the 
use  of  the  Company  such  suitable  office  or  offices  in  this  City  as  may 
be  necessary  for  the  proper  transaction  of  the  Company's  business,  such 
lease  to  be  for  one  year,  with  privilege  of  renewal,  at  an  annual  rental 
not  exceeding  $1,200,  and  the  office  so  secured  to  be  the  principal  office 
of  the  Company  within  the  State  of  New  York. 

Moved,  That  the  Secretary  be  hereby  instructed  to  purchase  all 
such  record,  stock  and  transfer  books  and  all  such  books  of  account  and 
stationery  and  office  supplies  as  may  be  necessary  for  the  proper  opera- 
tion and  record  of  the  Company's  business. 

Moved,  That  the  Secretary  be  instructed  to  prepare  or  have  pre- 
pared, in  due  and  proper  form,  a  certificate  of  the  payment  of  one-half 
the  capital  stock  of  the  Company,  and,  after  the  due  execution  and  veri- 
fication thereof,  to  file  said  certificate  as  required  by  law,  and  to  spread 
a  copy  thereof  upon  the  pages  of  the  Minute  Book  following  the  record  of 
the  present  proceedings. 

Moved,  That  the  Treasurer  be  and  hereby  is  authorized  and  directed 
to  pay  out  of  the  funds  of  the  Company  the  sum  of  five  hundred  dol- 
lars or  so  much  of  it  as  may  be  necessary  to  defray  the  cost  of  incor- 
poration of  the  Company  and  the  expenses  incident  thereto. 

Moved,  That  Messrs.  Henry  W.  Wilson  and  Frank  Freeman  be  here- 
by appointed  inspectors  of  election  to  serve  at  the  first  annual  election  of 
Directors  of  the  Company,  and  at  any  election  of  directors  by  the  stock- 
holders previous  thereto. 


FORMS   FOR   FIRST    MEETINGS.  2OO, 

There  being  no  further  business  for  consideration  the  meeting  was  ad- 
journed. 

FRANK  W.  JONES, 

HARRISON  FREEMAN,  Secretary. 

President. 


Following  the  preceding  minutes  on  the  pages  of  the 
minute  book  should  appear  the  form  of  stock  certificate  adopted 
at  the  meeting ;  also  copy  of  the  certificate  of  payment  of  one- 
half  the  capital  stock  of  the  company.  The  call  and  waiver 
of  notice  might  also  have  been  ordered  spread  upon  the  min- 
ute book  following  the  record  of  the  proceedings.-  The  pro- 
posal for  exchange  of  property  for  the  stock  of  the  company 
might  be  entered  in  the  same  way  after  the  record  of  the  pro- 
ceedings, but  is  used  so  directly  as  a  basis  for  the  subsequent 
proceedings  that  it.  is  better  incorporated  in  the  minutes  as 
shown.  (See  §  48.) 


CHAPTER  XX. 
MEETINGS.     FORMS. 


Form  17.     Notice  of  Annual  Meeting. 

ALBANY   MILLING   COMPANY, 
142  Capitol  "Street,     Albany,  New  York. 


JANUARY  2,  1906. 
MR.  FRANCIS  C.  WILSON, 

170  Broadway,  New  York. 

DEAR    SIR  :• — You   are   hereby   notified   that   the   Annual    Meeting  of 
Stockholders  of  the  Albany  Milling  Company  will  be  held  in  the  Com- 
pany's office,   142  Capitol  Street,  Albany,  New  York,  at  10  a.  m.,  Tues- 
.  day,  January  23rd,  1906,  for  the  election  of  directors  and  the  transaction 
of  such  other  business  as  may  come  before  the  meeting. 

The  stock  transfer  books  will  be  closed  January  I3th,  1906,  at  3  p.  m. 
and  remain  closed  until  10  a.  m.  of  January  24th,  1906. 

Respectfully, 

HENRY  IDE, 

Secretary. 


Under  the  New  York  statutes  the  notice  of  annual  meet- 
ing, or  of  any  other  election  of  directors,  must  be  published 
at  least  once  in  each  week  for  two  successive  weeks  immedi- 
ately preceding  the  election,  in  a  newspaper  published  in  the 
county  where  the  election  is  to  be  held.  (S.  C.  L.,  §  20.) 
This  is  in  addition  to  the  notice  prescribed  by  the  by-laws. 
(See  Chap.  X,  "Stockholders'  Meetings.")  Usual  forms  of 
publication  notice  are  as  follow. 

2IO 


MEETINGS.       FORMS.  211       f 

Form  18.     Notice  of  Annual  Meeting.     Publication. 
(a)  MORTON  TRUST  COMPANY. 


NEW  YORK,  December  20,  1905. 

The  Annual  Meeting  of  the  Stockholders  of  the  Morton  Trust  Com- 
pany will  be  held  at  the  office  of  the  Company,  38  Nassau  Street,  New 
York,  on  Wednesday,  January  17,  1906,  at  12  o'clock  noon. 

The  transfer  books  close  at  3  p.  m.  January  5,  1906,  and  reopen  at 
10  a.  m.  January  18,  1906. 

H.  M.  FRANCIS, 

Secretary. 


(b)     NEW  YORK  CLEARING  HOUSE  BUILDING  COMPANY. 

77  Cedar  Street, 


NEW  YORK,  January  4th,  1906. 

Notice  is  hereby  given  that  a  meeting  of  the  stockholders  of  the 
New  York  Clearing  House  Building  Company  will  be  held  at  the  office 
of  the  Company,  No.  77  Cedar  Street,  on  the  twenty-fifth  day  of  January, 
1906,  at  12  o'clock  noon,  for  the  purpose  of  electing  five  Directors  for  the 
ensuing  year,  and  two  Inspectors  of  Election,  to  serve  at  the  next  annual 
meeting,  and  for  the  transaction  of  such  other  business  as  may  properly 
come  before  said  meeting.  Polls  will  remain  open  until  12.30  p.  m. 

WILLIAM   SHERER, 

Secretary. 


The  statutes  require  the  appointment  of  inspectors  of 
elections,  who  take  entire  charge  of  and  conduct  the  election 
of  directors.  For  the  first  annual  meeting,  and  for  any  special 
election  of  directors  preceding,  the  inspectors  are  appointed 
by  the  board  of  directors.  Thereafter  they  are  elected  or  ap- 
pointed in  such  manner  as  is  prescribed  by  the  by-laws.  The 
number  of  inspectors  is  not  specified  but  at  least  two  are  re- 
quired. The  inspectors  are  sworn  to  the  faithful  discharge 
of  their  duties,  and  are  required  to  prepare,  sign  and  acknowl- 
edge a  certificate  showing  the  result  of  the  election  conducted 
by  them.  The  inspectors'  oath  and  certificate  must  be  filed 
with  the  clerk  of  the  county  in  which  the  election  is  held. 
(See  S.  C.  L.,  §  28.)^ 


212  NEW    YORK    CORPORATIONS. 

Form  19.     Oath.     Inspectors  of  Election. 

OATH  OF  INSPECTORS. 


STATE  OF  NEW  YORK,  )       . 
County  of  Albany.    /  " ' 

We,  the  undersigned,  duly  appointed  to  act  as  inspectors  of  election 
at  the  Annual  Meeting  of  the  stockholders  of  the  Hudson  River  Trans- 
portation Company,  to  be  held  in  the  office  of  the  Company,  132  State 
Street,  Albany,  New  York,  on  the  23d  day  of  January,  1906,  being  seve- 
rally duly  sworn,  depose  and  say,  and  each  for  himself  deposes  and  says, 
that  he  will  faithfully  execute  the  duties  of  inspector  of  election  at  such 
meeting  with  strict  impartiality  and  according  to  the  best  of  his  ability. 

FRANZ   HELMSBUND. 

Sworn  to  before  me  this  23d  day  )  WILLARD  DAVIS. 

of  January,  1906.  ) 

HENRY  T.  BLESSING, 
(  NOTARIAL  )  Notary  Public  for  Albany  County. 

{       SEAL.        J 


Form  20.     Certificate.     Inspectors  of  Election. 

(See  S.  C.  L,  §  28.) 
CERTIFICATE  OF  INSPECTORS  OF  ELECTION. 


We,  the  undersigned,  the  duly  appointed  inspectors  of  election  of 
the  Hudson  River  Transportation  Company  of  Albany,  New  York,  do 
hereby  certify  that  at  the  regular  annual  meeting  of  said  corporation 
held  at  the  office  of  the  Company,  132  State  Street,  Albany,  New  York, 
on  the  23d  day  of  January,  1906,  a  quorum  being  present,  we,  being  first 
duly  sworn  by  oath  hereunto  annexed,  did  conduct  the  election  for  direc- 
tors of  said  corporation,  and  that  the  result  of  the  vote  taken  thereat 
was  the  election  of  the  following  directors,  by  the  plurality  vote  set 
opposite  their  respective  names,  to  serve  until  the  next  annual  meeting 
of  stockholders  and  until  the  election  and  acceptance  of  their  duly  quali- 
fied successors. 

VOTES 
NAMES  RECEIVED 

Harmon  S.  McNeill  1,542 

Martin  B.  Severy  1,542 

Sherman  Allworths  1,542 

Willis  McCabe  1,100 

Harrison  Garland  1,092 

Wallis  McLean  1,092 

William  T.  Knight  1,002 

In  Testimony  Whereof,  we  have  executed  this  certificate  this 
23d  day  of  January,  1906. 

FRANZ  HELMSBUND. 

WILLARD  DAVIS. 


MEETINGS.       FORMS.  213 

STATE   OF    NEW    YORK,  \       . 
County  of  Albany.        f 

On  this  2.3d  day  of  January,  1906,  before  me  personally  came  Franz 
Helmsbund  and  Willard  Davis,  to  me  known  to  be  the  persons  described 
in  and  who  executed  the  foregoing  certificate  and  severally  acknowledged 
that  they  executed  the  same  for  the  use  and  purnoses  therein  set  forth. 

HENRY  T.  BLESSING, 

j  NOTARIAL  )  Notary  Public  for 

(      SEAL.      )  Albany  County. 

(See  "Table  of  Fees,"  page  347.) 

The  inspectors'  oath  and  certificate  are  either  arranged 
on  one  sheet  of  paper  or  on  attached  sheets  and  are  filed  to- 
gether in  the  County  Clerk's  office.  (See  §  108.) 

Form  21.     Call.     Special  Meeting  of  Stockholders. 
CALL  FOR  SPECIAL  MEETING  OF  STOCKHOLDERS. 


We,  the  undersigned,  Directors  of  the  Buffalo  Navigation  Company, 
do  hereby  call  a  special  meeting  of  its  stockholders  to  be  held  in  the 
Company's  office,  175  Lake  Street,  Buffalo,  New  York,  on  the  25th  day 
of  January,  1906,  for  the  purpose  of  considering  and  acting  upon  a  propo- 
sition to  consolidate  the  Company  with  the  Lake  Navigation  Company  of 
Buffalo,  and  for  the  transaction  of  any  and  all  business  in  connection 
therewith  that  may  be  necessary  or  desirable,  and  we  hereby  authorize 
and  instruct  the  Secretary  of  the  Company  to  send  out  notices  of  said 
special  meeting  in  accordance  with  the  by-law  requirements  of  this 
Company. 

Buffalo,  New  York,  HENRY  GILLETTE. 

January   i2th,   1906.  ROBERT  MORRIS. 

ROGER  HOWARD. 

SAMUEL  MARSHALL. 

WILLIAM  T.  RAMSDELL. 


The  method  of  calling  a  special  meeting  should  be  pre- 
scribed by  the  by-laws  and  is  usually  either  by  some  designated 
proportion  of  the  board  of  directors,  or  of  the  stockholders, 
or  by  the  president.  A  call  by  resolution  of  the  board  of  direc- 
tors is  always  proper.  The  call  for  a  special  meeting  is  handed 
the  secretary  and  it  is  then  the  duty  of  that  official  to  send  out 
the  proper  notices  in  accordance  with  the  call.  The  following 
is  a  usual  form  of  notice,  except  for  the  fact  that  the  authority 
for  issuing  the  notice  is  as  a  rule  stated  in  the  notice. 


214  NEW    YORK    CORPORATIONS. 

Form  22.     Notice.  t  Special  Meeting  of  Stockholders. 


CITY  AND   SUBURBAN   HOMES  COMPANY, 
281  Fourth  Ave.,  New  York. 

To  the  Stockholders  of  the 

CITY  AND  SUBURBAN  HOMES  COMPANY  : 

Notice  is  hereby  given  that  a  special  meeting  of  the  stockholders  of 
the  said  corporation  will  be  held  at  the  office  of  the  Company,  No.  281 
Fourth  Avenue,  Borough  of  Manhattan,  New  York  City,  on  Monday, 
December  i8th,  1905,  at  12  o'clock  noon,  to  act  upon  a  proposition  for 
the  purchase  by  said  Company  from  R.  Fulton  Cutting,  a  stockholder  and 
a  member  of  the  board  of  directors  of  the  said  City  and  Suburban  Homes 
Company,  of  a  certain  parcel  of  land  situate  in  the  Borough  of  Manhattan, 
City  of  New  York,  on  the  south  side  of  Sixty-fifth  Street,  two  hundred 
and  thirteen  feet  east  of  First  Avenue,  having  a  frontage  of  three  hun- 
dred feet  on  Sixty-fifth  Street  and  a  uniform  depth  of  one  hundred  feet 
and  five  inches,  for  the  consideration  or  purchase  price  of  eighty-seven 
thousand  ($87,000)  dollars,  together  with  the  sum  of  sixteen  thousand 
nine  hundred  and  five  dollars  and  fifty  cents  ($16,905.50),  being  the 
amount  expended  in  excavations  on  said  premises,  and  for  the  payment 
of  said  sums  in  cash  or  by  the  direct  obligation  of  said  Company;  and  to 
transact  such  other  and  further  business  as  may  properly  be  brought 
before  such  meeting. 

Dated,  Borough  of  Manhattan, 

City  of  New  York,  Dec.  I,  1905. 

GEORGE  W.  R.  FALLON, 

Secretary. 

(See  §  101.) 

If  the  authority  for  the  call  were  included  in  this  notice 
it  would  read  "  Notice  is  hereby  given  that,  pursuant  to  reso- 
lution of  the  board  of  directors,  a  special  meeting,  etc." 

Form  23.     Notice.     Regular  Meeting  of  Directors. 


WILLIS  MACHINE  COMPANY, 
175  Broadway,  New  York. 


FEBRUARY  i,  1906. 
MR.  HERMAN  T.  McCAix, 

158  Broadway,  New  York. 

DEAR  SIR  : — You  are  hereby  notified  that  the  regular  monthly  meeting 
of  the  Board  of  Directors  of  the  Willis  Machine  Company  will  be  held 
in  the  Company's  office,  175  Broadway,  February  8th,  at  10  a.  m. 

Respectfully, 

HENRY  M.  GALE, 
(See  §  I25b.)  Secretary. 


MEETINGS.       FORMS.  215 

Form  24.     Call.     Special  Meeting  of  Directors. 

THE  FREMONT  STEAMSHIP  COMPANY, 
133  South  St.,  New  York. 


JUNE   12,    1905. 
To  the  Secretary  of  the 

FREMONT  STEAMSHIP  COMPANY: 

In  accordance  with  the  authority  vested  in  me  by  the  by-laws  of 
this  Company,  I  hereby  call  a  special  meeting  of  the  Board  of  Directors 
to  be  held  in  the  office  of  the  Company  at  3  p.  m.,  on  the  isth  day  of  June, 
1905,  for  the  purpose  of  acting  upon  the  resignation  of  the  Treasurer 
of  the  Company,  Mr.  John  Ellis,  for  the  election  of  his  successor  and 
for  the  transaction  of  any  other  business  in  connection  therewith  that 
may  be  necessary ;  and  you  are  hereby  instructed  to  send  out  notices  of 
said  meeting  as  required  by  the  by-laws  of  this  Company. 

WlLHELM   VON   LOSSBERGH, 

President. 

(See  §  i2Sb.) 

When  this  call  is  handed  to  the  secretary,  it  becomes  the 
duty  of  that  official  to  see  that  the  required  notices  of  the 
meeting  are  duly  sent  out.  The  form  of  this  notice  would 
be  about  as  follows: 

Form  25.     Notice.     Special  Meeting  of  Directors. 


THE  FREMONT  STEAMSHIP  COMPANY, 
133  South  St.,  New  York. 


JUNE  13,   1905. 
MR.  JAMES  B.  HARTLEIGH, 

178  West  End  Ave.,  City. 

DEAR  SIR: — You  are  hereby  notified  that,  pursuant  to  a  call  of  the 
President,  a  special  meeting  of  the  Board  of  Directors  of  this  Company 
will  be  held  in  its  office  at  3  p.  m.,  on  the  15th  day  of  June,  1905,  for  the 
purpose  of  acting  upon  the  resignation  of  the  Treasurer  of  the  Company, 
Mr.  John  Ellis,  for  the  election  of  his  successor,  and  for  the  transaction 
of  such  other  business  in  connection  therewith  as  may  be  necessary. 

Respectfully, 

WILLIS  CAREY, 

Secretary. 


2l6  NEW    YORK    CORPORATIONS. 

Form  26.     Proxy.     Simple. 

PROXY. 

Know  All  Men  By  These  Presents,  That  I,  the  undersigned,  do 
hereby  constitute  and  appoint  John  Calhoun  my  true  and  lawful  attorney 
to  represent  me  at  all  meetings  of  the  stockholders  of  the  Corliss  Malting 
Company,  and  for  me  and  in  my  name  and  stead  to  vote  thereat  upon 
the  stock  standing  in  my  name  on  the  books  of  said  Company  at  the  times 
of  said  meetings,  and  I  hereby  grant  my  said  attorney  all  the  powers  that 
I  should  possess  if  personally  present. 

Witness  my  signature  and  seal  this  loth  day  of  January,  1906. 

WILLIAM  H.  COLES.     [L.  s.] 
In  presence  of 

FREDERICK  SPENCER. 

This  proxy  is  short  and  simple  as  to  form,  but  is  some- 
what broad  in  its  scope.  It  is  unlimited  as  to  time,  and,  until 
revoked  or  terminated  by  some  statutory  limitation,  applies  to 
every  stockholders'  meeting,  regular,  special  or  adjourned. 
(See  G.  C.  L.,  §  21.) 

Form  27.     Formal  Proxy.     Annual  Meeting. 


PROXY 

FOR 
ANNUAL  STOCKHOLDERS'  MEETING. 


Know  All  Men  By  These  Presents,  That  I,  the  undersigned,  a  stock- 
holder in  the  Carston  Casting  Company  of  Troy,  New  York,  do  hereby 
constitute  and  appoint  Jasper  Wellman  my  true  and  lawful  attorney,  with 
full  powers  of  substitution  and  revocation  to  represent  me  and  for  me 
and  in  my  name,  place  and  stead,  to  vote  upon  the  stock  of  said  corpora- 
tion standing  in  my  name,  or  upon  which  I  then  may  be  entitled  to  vote, 
at  the  annual  meeting  of  the  stockholders  of  said  corporation,  to  be  held 
on  the  8th  day  of  January,  1906,  and  at  any  meeting  postponed  or  ad- 
journed therefrom,  hereby  granting  to  my  said  attorney  full  power  and 
authority  to  act  for  me  at  said  meeting  and  in  my  name  and  stead  to  vote 
thereat  upon  my  said  stock  in  the  election  of  directors  and  in  the  trans- 
action of  such  other  business  as  may  be  brought  before  said  meeting,  all 
as  fully  as  I  might  or  could  do  if  personally  present,  and  I  hereby  ratify 
and  confirm  all  that  my  said  attorney  or  his  substitute  shall  lawfully 
do  at  such  meeting  in  my  name,  place  and  stead. 

IN  WITNESS  WHEREOF,  I  have  hereunto  affixed  my  signature  and 
seal  this  second  day  of  January,  1906. 

In  presence  of  SAMUEL  WELLMAN.     [L.  s.] 

HARRISON  WILSON. 


MEETINGS.       FORMS. 

This  proxy  is  specific  and  formal.  It  does  not  convey 
any  greater  or  more  complete  powers  than  the  short  form  al- 
ready given.  It  is,  however,  conventional  and  will  be  found 
more  satisfactory  under  formal  conditions  or  where  matters 
of  much  importance  are  to  be  considered.  It  may  readily  be 
adapted  to  apply  to  any  meeting  by  substituting  "  at  any  and 
all  regular  or  special  meetings  of  the  stockholders  of  said  cor- 
poration, and  at  any  meeting  or  meetings  adjourned  there- 
from "  in  place  of  "  at  the  annual,  etc.,"  and  changing  the 
matters  to  be  acted  upon  to  "  any  and  all  matters  brought 
before  said  meeting  or  meetings."  (See  §  104.) 

Form  28.     Revocation  of  Proxy. 


REVOCATION  OF  PROXY. 

I,  the  undersigned,  do  hereby  revoke  and  annul  any  and  all  proxies 
or  powers  of  attorney  heretofore  given  by  me,  as  far  as  the  same  may 
authorize  or  empower  any  person  or  persons  to  represent  me,  vote  in  my 
name  and  stead,  or  act  for  me  in  any  way  whatsoever,  at  any  meeting  or 
meetings  of  the  stockholders  of  the  Corliss  Malting  Company. 

Witness  my  signature  and  seal  this  fifth  day  of  June,  1905. 
In  presence  of  NATHAN  GOODHUE.     [L.  s.] 

HARVEY  McKAY. 


CHAPTER  XXI. 
STOCK  CERTIFICATES  AND  STOCK  BOOKS. 


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22O  NEW    YORK    CORPORATIONS. 

The  conditions  under  which   preferred  stock  is   issued 
should  appear  upon  its  face,  as  in  the  foregoing  form. 

Form  31.     Assignment  of  Stock  Certificate.     In  Blank. 


For  Value  Received. ..  .hereby  sell,  assign  and  transfer  unto 

Shares 

of  the  Capital  Stock  represented  by  the  within  Certificate,  and  do  hereby 

irrevocably  constitute  and  appoint 

my  Attorney  to  transfer  the  said  stock  on  the  books  of  the  within-named 
Company,  with  full  power  of  substitution  in  the  premises. 

HAROLD  CHALMER. 

Dated 190 

In  presence  of 

JERE  H.  McLAiN. 


(See  §  87.) 

This  form  of  assignment  appears  upon  the  back  of  the 
stock  certificate.  It  is  the  only  form  in  common  use.  The 
signature  when  a  transfer  is  to  be  made  must  correspond 
exactly  with  the  name  upon  the  face  of  the  certificate. 

When  the  assignment  is  executed  in  blank  as  above  the 
certificate  may  pass  from  hand  to  hand  without  change.  In 
such  case  the  equitable  title  follows  the  certificate  until  the 
name  of  some  transferee  is  filled  in  as  in  the  form  below. 

Form  32.     Assignment  of  Stock  Certificate.     Complete. 


For  Value  Received,  I  hereby  sell,  assign  and  transfer  unto  Wilson 
Montgomery,  of  New  York  City,  Twenty-five  (25)  Shares  of  the  Capital 
Stock  represented  by  the  within  Certificate,  and  do  hereby  irrevocably 
constitute  and  appoint  Samuel  H.  Colesworth,  my  Attorney  to  transfer 
the  said  stock  on  the  books  of  the  within-named  Company,  with  full  power 
of  substitution  in  the  premises. 

HAROLD  CHALMER. 

Dated  February  10,  1906. 

In  presence  of 

JERE  H.  McLAiN. 


STOCK    CERTIFICATES  AND   STOCK   BOOKS.  221 

When  this  assignment  is  completed  the  name  of  the  sec- 
retary of  the  company  is  usually  inserted  as. the  attorney  who 
is  to  make  the  transfer  on  the  books  of  the  company,  though 
any  other  suitable  person  might  be  named  instead. 

Form  33.     Indemnity  Bond.    Reissue  of  Lost  Certificate. 

INDEMNITY  BOND. 

Know  All  Men  By  These  Presents,  That  we,  Willis  B.  Marcellus, 
of  Yonkers,  New  York,  as  principal,  and  Henry  White,  of  New  York 
City,  as  surety,  are  held  and  firmly  bound  unto  the  Industrial  Develop- 
ment Company  of  New  York,  a  corporation  duly  organized  under  the 
laws  of  the  State  of  New  York,  its  successors  and  assigns,  in  the  sum 
of  Five  Thousand  Dollars  ($5,000),  to  the  payment  of  which  to  the  said 
corporation,  its  successors  and  assigns,  we  do,  by  these  presents,  jointly 
and  severally,  firmly  bind  ourselves,  our  heirs,  executors  and  adminis- 
trators. 

Signed  and  sealed  this  twenty-fifth  day  of  January,  1906. 

The  condition  of  the  above  obligation  is  that : 

Whereas,  The  said  Willis  B.  Marcellus,  the  owner  of  record  of 
twenty-five  (25)  shares  of  the  capital  stock  of  the  said  Industrial  Develop- 
ment Company  of  New  York,  of  the  par  value  of  $100  each,  has  made 
application  to  the  Board  of  Directors  of  the  said  Company  for  the  issue 
to  him  of  a  new  certificate  for  the  said  twenty-five  shares  of  stock,  alleg- 
ing that  the  original  certificate,  No.  274,  issued  to  him  therefor  on  the 
twenty-first  day  of  July,  1905,  is  lost,  stolen  or  destroyed,  and  that  its 
present  whereabouts  and  condition  are  unknown  to  him ;  and 

Whereas,  The  said  application  has  been  granted,  and  the  said  new 
certificate  for  twenty-five  shares  of  the  stock  of  the  Industrial  Develop- 
ment Company  of  New  York,  pursuant  to  due  and  formal  resolution  of 
the  said  Board  of  Directors,  was  this  day  issued  to  the  said  Willis  B. 
Marcellus ; 

Now  Therefore,  If  the  said  Willis  B.  Marcellus,  his  heirs,  executors 
or  administrators,  or  any  of  them,  do  and  shall,  from  time  to  time,  and 
at  all  times  hereafter,  save,  defend,  keep  harmless  and  indemnify  the 
said  Industrial  Development  Company  of  New  York,  its  legal  successors 
and  assigns,  of,  from  and  against,  all  demands,  claims,  or  causes  of 
action,  arising  from  or  on  account  of  said  certificate  No.  274  for  twenty- 
five  shares  of  the  capital  stock  of  the  said  Industrial  Development  Com- 
pany of  New  York,  and  of  and  from  all  costs,  damages  and  expenses  that 
shall  or  may  arise  therefrom,  and  shall  also  deliver,  or  cause  to  be  de- 
livered up  to  the  said  Industrial  Development  Company  of  New  York 
the  said  missing  certificate  No.  274  for  cancellation,  whenever  and  so  soon 
as  the  same  shall  be  found,  then  this  obligation  shall  be  void;  otherwise 
to  remain  in  full  force  and  effect. 

WILLIS  B.  MARCELLUS.     [L.  s.] 

Signed,  sealed  and  delivered  HENRY  WHITE.  [L.  s.] 

in  the  presence  of 

HERMAN  FRANZ. 
ALLIS  V.  SHERMAN. 

(See  §  83.) 


222  NEW    YORK    CORPORATIONS. 

Form  34.     Transfer  Book. 

Ledger  Folio  86.  Transfer  No.  224. 

THE  HARTLEY  METAL  CARTRIDGE  COMPANY. 


For  value  received,  I  hereby  sell,  assign  and  transfer  to  John  W. 
Markham,  of  New  York  City,  Seventy-five  (75)  Shares  of  the  Capital 
Stock  of  the  above-mentioned  Company,  now  standing  in  my  name  on 
the  Company  books  and  represented  by  surrendered  certificates,  Nos.  125 
and  126. 

Witness  my  hand  and  seal  this  fifteenth  day  of  February,  1906. 

HOWARD  ALTMAN,          [L.  s.] 
BY  HENRY  GOLDING, 

Attorney. 

New  Certificates,  Nos.  334,  335, 
Issued  to  John  W.  Markham. 
Ledger  Folio  109. 

(See  §  I35-) 

This  transfer  remains  in  the  transfer  book  and  together 
with  the  assignment  on  the  back  of  the  surrendered  certificate, 
is  the  secretary's  authority  for  the  issue  of  the  new  certificates 
required.  The  stub  so  commonly  provided  in  transfer  books 
is  merely  a  duplication  of  details  already  incorporated  in  the 
transfer  and  may  well  be  omitted  or  disregarded. 

The  signature  to  the  assignment  of  the  transfer  book  is 
sometimes  witnessed,  but,  as  this  transfer  is  usually  signed  by 
the  secretary  or  the  transfer  agent,  or  in  the  presence  of  the 
secretary,  and  as  it  is  merely  supplementary  to  the  ordinary 
duly  witnessed  assignment  on  the  back  of  the  surrendered 
certificate,  the  witnessing  of  the  transfer  book  signature  is 
generally  regarded  as  superfluous  and  is  omitted. 

The  transfer  book  is  not  required  by  the  New  York 
statutes  and  is  not  usually  kept  by  the  smaller  corporations. 

The  stock  book  and  the  stock  ledger  are  practically  one 
and  the  same  book.  In  practice  the  stock  ledger  under  its 
own  name,  or  under  the  title  "  Stock  Book  and  Stock  Ledger," 


STOCK    CERTIFICATES   AND   STOCK   BOOKS.  223 

is  so  arranged  as  to  contain  all  matters  that  would  properly 
be  entered  in  a  stock  book  or  a  stock  ledger.  (See  §  136.) 

The  New  York  law  is  peremptory  in  regard  to  the  keep- 
ing of  such  stock  book.  Heavy  penalties  are  prescribed  for 
failure  so  to  do  and  it  is  further  provided  that  no  transfer 
of  stock  shall  be  valid  as  against  the  corporation,  its  stock- 
holders and  creditors,  except  to  render  the  transferee  subject 
to  the  statutory  liabilities  of  a  stockholder,  until  the  transfer 
has  been  duly  entered  in  the  stock  book. 

The  form  of  stock  book  and  stock  ledger  given  on  the 
following  page  complies  with  the  requirements  of  the  statutes 
and  will  be  found  convenient  and  effective. 

The  leaves  of  this  book  are  indexed  to  secure  the  requisite 
alphabetical  arrangement,  and  the  name  and  address  of  the 
stockholder  appear  at  the  head  of  the  page  as  in  an  ordinary 
ledger.  On  the  right  hand  side  of  the  page  the  party  is 
credited  with  the  stock  he  purchases  or  otherwise  acquires, 
and  on  the  left  hand  side  is  debited  with  any  stock  disposed 
of.  The  difference  between  the  two  sides  shows  at  any  time 
the  amount  of  stock  standing  to  his  credit. 

On  the  debit  or  sales  side  of  the  account,  the  first  column 
gives  the  date  of  the  transaction,  the  second  the  name  of  the 
party  to  whom  the  stock  is  transferred,  the  third  the  number 
of  the  surrendered  certificate,  the  fourth  the  number  of  the 
certificate  reissued  to  the  transferror  in  case  but  a  portion  of 
the  stock  represented  by  the  surrendered  certificate  is  sold, 
and  the  fifth  column  the  number  of  shares  disposed  of. 

On  the  credit  side,  the  first  column  gives  the  date  of 
acquisition,  the  second  the  name  of  the  party  from  whom  it 
is  obtained,  the  third  the  character  of  the  stock,  whether 
full-paid  or  but  part-paid,  and  if  the  latter,  the  amount  that 
has  been  paid  the  company  thereon,  the  fourth  column  the 
number  of  the  certificates  issued  to  the  party,  and  the  last 
the  number  of  shares  acquired. 


224 


NEW    YORK    CORPORATIONS. 


Form  35.     Stock  Book  and  Stock  Ledger. 


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CHAPTER  XXII. 
SIGNATURES  AND  CERTIFICATES. 


Form  36.     Official  Signatures. 


(a)  HARRIS  M.  CHALMERS, 

President. 

(b)  HARRIS  M.  CHALMERS, 

President  Chalmers  Mining  Company. 


Official  signatures  such  as  given  above  are  used  by  cor- 
poration officials  in  informal  matters,  either  where  the  trans- 
action does  not  involve  binding  the  corporation,  or  where, 
if  the  corporation  is  to  be  bound,  custom  or  special  authoriza- 
tion has  empowered  the  signing  official  to  act  in  his  individual 
official  capacity.  When  the  official  signature  is  used  the  com- 
plete form  given  above  (b)  should  always  be  employed,  unless 
by  letter  heading,  subject  matter,  or  in  some  other  way,  the 
identity  of  the  corporation  for  which  the  official  is  acting  is 
clearly  indicated. 

When  important  instruments  are  to  be  signed  or  the  cor- 
poration is  to  be  bound  formally,  the  corporate  signature  as 
in  the  form  which  follows  should  be  employed.  This  corpo- 
rate signature  is  also  frequently  and  properly  used  as  the 
signature  to  any  document  relating  to  the  company  business. 

225 


226  NEW    YORK    CORPORATIONS. 

Form  37.     Corporate  Signatures. 


(a)     CHALMERS  MINING  COMPANY, 

By 

President. 


(b)  CHALMERS  MINING  COMPANY, 

BY  HARRIS  M.  CHALMERS, 

President. 

(c)  Attest  Seal: 

HENRY  T.  WILKINS, 

Secretary. 

(d)  In  Witness  Whereof,  the  said  Chalmers  Mining  Company  has 

hereunto  caused  its  corporate  name  to  be  signed  by  its 
President,  and  its  corporate  seal  to  be  affixed  by  its  Secre- 
tary, all  being  done  in  the  City  of  New  York  on  this  seven- 
teenth day  of  January,  1906. 

CHALMERS  MINING  COMPANY, 

BY  HARRIS  M.  CHALMERS, 

President. 

CORPORATE    )  HENRY  T.  WILKINS, 

SEAL.       [  Secretary. 


The  first  of  these  forms  (a)  shows  a  partial  corporate 
signature  awaiting  completion  by  insertion  of  the  president's 
signature  as  shown  in  (b).  The  portion  of  the  signature 
shown  in  (a)  is  usually  impressed  with  a  rubber  stamp.  Any 
other  official  of  the  company  might  affix  the  corporate  signa- 
ture with  equal  propriety,  if  authorized  thereto,  or  might  join 
with  the  president  in  such  signature.  The  form  for  attesta- 
tion of  seal  is  shown  in  (c).  In  (d)  is  shown  a  formal  cor- 
porate signature  complete,  affixed  to  the  testimonium — or 
final  clause — of  a  corporate  contract.  As  the  secretary  joins 
with  the  president  in  the  corporate  signature,  no  attestation 
of  the  seal  is  necessary. 

The  first 'that  follows  is  the  simple  corporate  endorsement, 
usually  affixed  by  the  treasurer  or  cashier,  though  the  presi- 
dent is  sometimes  authorized  thereto.  The  second  is  the  form 
usually  employed  when  the  instrument  is  deposited  for  collec- 
tion or  credit.  This  latter  endorsement  is  generally  affixed 
in  its  entirety  with  a  rubber  stamp. 


SIGNATURES  AND  CERTIFICATES.  227 

Form  38.     Corporate  Endorsements. 

(a)  (b) 


o 
U 


U 


Form  39.     Corporate  Acknowledgment. 


STATE  OF  NEW  YORK,     |         . 
County  of  New  York,   j 

On  this  twelfth  day  of  February,  in  the  year  1906,  before  me  came 
Willard  J.  Cowles,  to  me  known,  who,  being  by  me  duly  sworn,  did  de- 
pose and  say  that  he  resided  in  the  City  of  New  York;  that  he  is  the 
president  of  the  Stuart  &  Cowles  Contracting  Company,  the  corporation 
described  in  and  which  executed  the  above  instrument;  that  he  knew  the 
seal  of  said  corporation;  that  the  seal  affixed  to  said  instrument  was 
such  corporate  seal ;  that  it  was  so  affixed  by  order  of  the  board  of  direc- 
tors of  said  corporation,  and  that  he  signed  his  name  thereto  by  like 
order. 

WILLARD  J.  COWLES. 
Sworn  to  before  me  this   I2th   ) 

day  of  February,  1906.  J 

JAMES  W.  BLACK, 

j  NOTARIAL  )  Notary  Public 

(      SEAL.      )  for  New  York  County. 


A  corporate  acknowledgment  is  the  acknowledgment  of 
one  or  more  of  the  officers  of  the  corporation  as  given  above. 
It  has  the  same  effect  as  if  made  by  the  corporation  as  a  legal 
entity.  The  form  given  is  that  prescribed  by  the  Real  Property 
Law,  §  258. 


228  NEW    YORK    CORPORATIONS. 

Form  40.     Treasurer's  Affidavit. 

STATE  OF  NEW  YORK,     ) 
County  of  New  York.    J    ' 

On  this  fifteenth  day  of  February,  1006,  personally  appeared  before 
me,  a  Notary  Public  in  and  for  the  County  of  New  York,  William  H. 
Cook,  Treasurer  of  the  Cook  Bank  Note  Company,  who,  being  duly  sworn, 
did  depose  and  say  that  he  has  full  charge  and  control  of  the  books  and 
accounts  of  the  said  Company;  that  the  above  and  foregoing  statement  is 
taken  from  said  books  and  accounts ;  that  it  is  a  true  and  accurate  trans- 
cript therefrom,  and  that,  to  the  best  of  his  knowledge  and  belief,  it  is  a 
just  and  correct  presentation  of  the  financial  condition  of  said  Company 
on  this  date. 

WILLIAM  H.  COOK. 
Sworn  to  before  me  this  isth  ) 

day  of  February,  1906.         j 

JAMES  H.  CRAMPTON, 

(  NOTARIAL  I  Notary  Public 

I      SEAL.     )  for  New  York  County. 


Any  statement,  report,  notice  or  other  document  prepared 
by  an  officer  of  a  corporation  and  requiring  an  affidavit,  is 
ordinarily  certified  to  by  the  officer  by  whom  it  was  prepared, 
though  any  other  officer  having  sufficient  knowledge  of  the 
matter  might  act,  the  wording  of  the  affidavit  being  varied 
to  meet  the  conditions. 

In  active  corporations  the  secretary  is  frequently  called 
upon  to  give  certified  copies  of  proceedings,  resolutions,  etc. 
The  following  certifications  of  an  extract  from  the  minutes 
and  of  a  resolution  give  the  general  form. 

Form  41.     Certification.     Extract  from  Minutes. 

HOWARD  DRILLING  COMPANY. 


TRANSCRIPT  OF  MINUTES.     SPECIAL  MEETING  OF  DIRECTORS. 


"Pursuant  to  call  and  notice,  the  Board  of  Directors  of  the  Howard 
Drilling  Company  met  in  special  meeting  in  the  office  of  the  Company, 


SIGNATURES  AND  CERTIFICATES. 

February  15,  1906,  at  2  p.  m.  President  Arthur  C.  Howard  presided, 
Secretary  Horace  Ogden  officiated  as  recording  officer,  etc."  (Balance  of 
Minutes  or  such  portion  as  is  to  be  certified  would  follow.) 


I,  the  undersigned,  Secretary  of  the  Howard  Drilling  Company,  do 
hereby  certify  that  the  above  and  foregoing  is  a  true  and  accurate  trans- 
cript of  the  minutes  of  the  proceedings  at  a  special  meeting  of  the  Board 
of  Directors  of  said  Company,  held  in  the  office  of  the  Company  on 
the  fifteenth  day  of  February,  1906,  at  2  p.  m.,  to  consider  and  act  upon 
a  proposition  to  purchase  and  take  over  the  entire  plant  and  business  of 
the  McGovern  Contracting  Company  of  New  York  City. 

In  Testimony  Whereof,  I  have  affixed  hereunto  my  official  sig- 
nature and  the  corporate  seal  of  said  Company,  in  the  City 
of  New  York,  on  this  sixteenth  day  of  February,  1906. 

j  CORPORATE  )  HORACE  OGDEN, 

I       SEAL,      f  Secretary. 


If  desirable  the  president  might  with  entire  propriety  join 
with  the  secretary  in  the  certification  of  any  specially  impor- 
tant transcripts.  In  such  event  the  introductory  phrase  would 
be  changed  as  follows :  "  We,  the  undersigned,  President 
and  Secretary  respectively  of  the  Howard,  etc.,"  and  the 
testimonium  would  also  be  changed  to  correspond :  "In  Testi- 
mony Whereof,  we  have  hereunto  affixed  our  official  signa- 
tures and  the  corporate  seal,  etc." 

Form  42.     Certified  Resolution  for  Bank. 


CERTIFIED  RESOLUTION. 


"Resolved,  That  the  Treasurer  be  and  hereby  is,  authorized  and 
instructed  to  open  an  account  for  the  Company  with  the  Seaboard 
National  Bank  of  New  York  City  and  to  deposit  therein  all  of  the 
funds  of  the  Company  coming  into  his  custody ;  such  account  to  be 
in  the  name  of  the  Company,  and  funds  deposited  therein  to  be  with- 
drawn only  by  check  signed  by  the  Treasurer  and  countersigned  by 
the  President." 

I  hereby  certify  that  the  foregoing  is  a  true  and  accurate  transcript 
of  a  resolution  duly  passed  at  a  regular  meeting  of  the  Board  of  Direc- 
tors of  the  Allis  Drug  Company  held  in  the  office  of  said  Company  in 
New  York  City  at  II  a.  m.,  on  the  tenth  day  of  February,  1905,  as  shown 
by  the  minutes  of  said  meeting;  and  that  Charles  Allis  is  the  duly  elected 


230  NEW    YORK    CORPORATIONS. 

President  of  said   Company   and  James  W.    Blount  is   the   duly  elected 
Treasurer  of  said  Company. 

In  Testimony  Whereof,  I  have  hereunto  affixed  my  official  sig- 
nature and  the  corporate  seal  of  said  Company,  this  tenth 
day  of  February,  1905. 

j  CORPORATE    )  ROGER  H.  SHERMAN, 

I       SEAL.       j  Secretary. 


The  above  is  a  good  general  form  employed  in  opening 
the  corporate  bank  account.  In  many  cases,  however,  the 
banks  have  their  own  forms  for  this  purpose  which  they 
naturally  prefer.  As  a  rule  these  forms  are  good,  though 
occasionally  the  latitude  and  powers  conferred  upon  the  treas- 
urer, or  other  officer  or  officers  concerned  in  the  finances  of 
the  company,  are  almost  too  broad.  In  such  cases  the  bank's 
form  can  be  modified  to  meet  the  wishes  of  the  particular 
corporation  while  still  preserving  the  general  form  supplied 
by  the  bank. 

In  some  cases  the  bank  will  require  a  certified  trans- 
script  of  any  by-laws  relating  to  the  custody  of  funds  and 
the  duties  of  the  officers  in  relation  thereto.  In  such  event 
the  resolution  and  transcript  might  be  written  on  the  same 
sheet  and  be  covered  by  the  one  certification,  modified  to 
meet  the  conditions,  or  each  might  be  certified  separately. 

The  clause  certifying  to  the  identity  of  the  president 
and  treasurer  in  the  foregoing  certification  is  merely  included 
as  necessary  information  for  the  bank  in  the  matter  in  hand 
and  not  as  a  necessary  part  of  a  certification. 

One-half  the  authorized  capital  stock  of  every  business 
corporation  must  be  paid  in  within  one  year  of  its  organization 
and  a  certificate  thereof,  as  in  the  following  form,  must  be 
filed  in  the  office  of  the  Secretary  of  State  and  of  the  county 
clerk  within  thirty  days  thereafter.  Fees  to  Secretary  of 
State  for  recording  same,  15  cents  per  folio;  to  County  Clerk, 
6  cents  for  filing  and  10  cents  per  folio  for  recording.  (See 
§  74;  also  B.  C.  L.,  §  5  and  S.  C.  L.,  §  42.) 


SIGNATURES  AND  CERTIFICATES.  23! 

Form  43.     Certificate.     Payment  One-Half  Capital  Stock. 

THE  PROPRIETARY  MANUFACTURING  COMPANY 
CERTIFICATE  OF  PAYMENT  OF  ONE-HALF  OF  CAPITAL  STOCK 


A  Corporation  formed  under  the  Business  Corporations  Law 
of  the  State  of  New  York. 


We,  the  undersigned,  a  majority  of  the  directors  of  the  above  named 
corporation,  do  hereby  certify  that  the  capital  stock  of  said  corporation 
is  Twenty  Thousand  Dollars  ($20,000)  and  that  one-half  thereof  has  been 
paid  in,  and  that  such  payment  was  made  within  one  year  from  the  in- 
corporation of  said  company  and  within  thirty  days  preceding  the  date  of 
this  certificate  of  payment  and  that  of  said  paid  in  stock,  Five  Thousand 
Dollars  ($5,000)  was  issued  for  property  purchased. 

IN  WITNESS  WHEREOF,  We  have  executed  this  certificate  in  duplicate 
this  eighth  day  of  January,  1906. 

ENNIS  C.  CORNELL. 
E.  H.  DAVEY. 
MORRIS  POTTER. 

STATE    OF    NEW    YORK,  | 

County  of  Kings.          j    ss': 

On  this  eighth  day  of  January,  1906,  before  me  personally  came, 
Ennis  C.  Cornell,  E.  H.  Davey  and  Morris  Potter,  to  me  personally  known 
and  known  to  me  to  be  the  individuals  described  in  and  who  executed  the 
foregoing  certificate  and  severally  acknowledged  to  me  that  they  executed 
the  same. 

C  D.  DuBois, 

j   NOTARIAL   )  Notary  Public, 

1       SEAL.       f  Kings  County,  N.  Y. 

STATE    OF    NEW    YORK,  ) 
County  of  Kings.          f 

Ennis  C.  Cornell  and  E.  H.  Davey,  being  severally  duly  sworn,  each 
for  himself,  deposes  and  says,  that  he,  the  said  Cornell,  is  the  president 
of  The  Proprietary  Manufacturing  Company  and  that  the  said  E.  H.  Davey 
is  the  secretary  thereof,  and  that  the  statements  contained  in  the  forego- 
ing certificate  are  true. 

ENNIS  C.  CORNELL, 

President. 
Sworn  to  before  me  this  8th  \  E.  H.  DAVEY, 

day  of  January,  1906.  /  Secretary. 

C.  D.  DuBois, 

j  NOTARIAL  |  Notary  Public, 

(       SEAL.      J  Kings  County,  N.  Y. 


CHAPTER  XXIII. 
FORMS  OF  REPORTS. 


The  usual  official  reports  made  by  New  York  corpora- 
tions are  three  in  number:  (i)  Report  to  Secretary  of  State, 
generally  known  as  the  "Annual  Report."  (2)  Report  to 
State  Comptroller.  (3)  Local  tax  report.  These  are  all  an- 
nual reports.  Blanks  for  the  comptroller's  report  and  the 
local  tax  report  are  furnished  by  the  authorities  but  for  the 
annual  report  are  not  so  supplied.  (See  Chap.  XVI,  "Re- 
ports.") 

Form  44.     Annual  Report.  * 


NATIONAL  DEVELOPMENT  COMPANY. 
ANNUAL  REPORT 


I,  James  C.  Bradley,  President  of  the  National  Development  Com- 
pany, a  domestic  stock  corporation,  do,  in  accordance  with  the  require- 
ments of  Section  30  of  the  Stock  Corporation  Law,  as  amended  by  Chap- 
ter 415  of  the  Laws  of  1905,  hereby  make  a  report  as  of  the  first  day  of 
January,  1906,  as  follows : 

1.  The  amount  of  its   capital   stock   is   $100,000  and   the  proportion 
actually  issued  is  $100,000. 

2.  The  amount  of  its  debts  does  not  exceed  $2,000. 

3.  The  amount  of  its  assets  is  at  least  equal  to  $100,000. 

4.  The  names  and  addresses  of  its  officers  are  as  follows : 

James  C.  Bradley,  President,  300  Broadway,  New  York. 

Henry  C.  Brown,  Secretary  and  Treasurer,  50  State  St.,  Albany,  N.  Y. 

232 


FORMS   OF   REPORTS.  233 

The  names  and  addresses  of  its  directors  are  as  follows : 
James  C.  Bradley,  300  Broadway,  New  York. 
Henry  C.  Brown,  50  State  St.,  Albany,  N.  Y. 
Robert  B.  Taylor,  308  So.  Pearl  St.,  Albany,  N.  Y. 
In  Witness  Whereof,  I  have  hereunto  set  my  hand  this  third  day  of 
January,   1906. 

JAMES  C.  BRADLEY, 

President. 

•  (See  S.  C.  L.,  §  30.) 

This  report  is  purely  perfunctory  in  its  nature.  Nothing 
is  based  upon  it,  the  information  given,  except  as  to  the  ad- 
dresses, is  too  vague  to  be  of  value,  and  no  penalty  is  imposed 
for  a  failure  to  file  the  report  unless  such  filing  is  demanded 
in  writing  by  some  stockholder  or  creditor  of  the  company. 
In  case  such  request  is  made  the  report  must  be  filed  within 
ten  days  thereof  under  penalty  thereafter  of  fifty  dollars  for 
each  day  of  continued  failure. 

The  report  must  be  signed  by  the  president,  vice-presi- 
dent, secretary  or  treasurer  but  need  not  be  sworn  to.  It  is 
filed  in  the  office  of  the  Secretary  of  State.  No  fees  are  re- 
quired. The  prescribed  time  of  filing  is  during  the  month  of 
January,  or,  for  corporations  doing  business  in  foreign  coun- 
tries, before  the  first  day  of  May.  (See  §  174.) 

Form  45.     Report  to  Comptroller.  Domestic  Corporation. 


Report  should  be  made  on  or  before  November  I5th.  Tax  is  payable 
on  or  before  January  15th  following. 

REPORT  of  the  Coleman  Inhaler  Company  for  the  year  ending  October 
31,  1905,  made  pursuant  to  provisions  of  §  182,  Chapter  908,  Laws  of  1896, 
and  acts  amendatory  thereof. 

(Give  post-office  address  of  Company,  Street  and  No.) 

507  Broadway,  New  York,  Nov.  2,  1905. 

To  the  Comptroller  of  the  State  of  New  York: 

Agreeably  to  law,  as  Treasurer  of  the  above  Company,  I  make  the 
following  report,  viz. : 

1.  This  Company  began  business  in  the  State  of  New  York  in  the 
month  of  March,  ig/oi. 

2.  The  last  report  made  by  this  Company  to  the  Comptroller  of  the 


234  NEW    YORK    CORPORATIONS. 

State  of  New  York  under  the  provisions  of  the  above  act  was  made  for 
the  year  ending  October  31,  1904. 

3.  Value  of  real  estate  and  of  interest  or  interests  in  real  property 
in  New  York  State,  and  where  situated $  20,000 

Factory  situated  at  Yonkers. 

4.  Organized  under  the  laws  of  the  State  of  Nezv  York. 

5.  Date  of  Organization  of  the  Company  January  3d,  1001. 

6.  Total  authorized  Capital  of  the  Company $500,000 

7.  Whole  number  of  shares  of  stock  authorized 5,ooo 

8.  Number  of  shares  of  stock  issued 5,°°o 

9.  Par  value  of  each  share $       100 

10.     Amount  paid  into  the  treasury  of  the  Company  on  each  share  $/oo. 
1 1. a.  Amount  of  Capital  paid  in  cash  or  property $  30,000 

b.  Amount  of  Capital  paid  in  good  will None. 

c.  Amount  of  Capital  paid  in  patents  or  copyrights $470,000 

12.  Amount  of  Capital  upon  which  dividends  were  declared  $500,000. 

13.  Date  of  each  dividend  declared  January  2,  1905,  July  ist,  1005. 

14.  Amount  of  each  dividend  declared $    2,500 

15.  Rate  per  cent,  per  annum  of  dividends One  per  cent. 

16.  The  business  transacted  by  this  Company  in  the  State  of  New 
York  for  the  year  ending  October  31,   1905,  was  as  follows,  viz.    (give 
nature  of  business  and  how  carried  on)  : 

Manufacturing  and  selling  medical  inhalers. 

17.  And  such  business  was  carried  on  at  the  following  named  place 
or  places  (give  street  and  number)  : 

507  Broadway,  New  York  City. 

18.  Capital  Stock  employed  in  New  York  State $ 

(Preceding  line  need  not  be  filled  out  by  Companies  whose  Capital 

is  all  employed  in  this  State.) 

19.  If  not  in  New  York  State,  where  and  how  employed. 

20.  What  percentage  of  Capital  is  employed  in  manufacturing  in  State 
of  New  York?     75%. 

21.  Highest  price  of  sales  of  stock  during  the  year  aforesaid  $.?o. 

22.  Lowest  price  of  sales  of  stock  during  the  year  aforesaid  $/^. 

ROBERT  COLEMAN, 

STATE  OF  NEW  YORK,     )  Treasurer. 

County  of  New  York.  J    ' 

On  this  second  day  of  November,  A.  D.  1905,  personally  appeared 
before  me,  a  Notary  Public  in  and  for  the  County  of  New  York,  Robert 
Coleman,  Treasurer  of  the  above-named  Company,  who,  being  duly  sworn 
according  to  law,  did  depose  and  say  that  the  foregoing  report  is  just, 
true  and  correct  according  as  the  accounts  stand  in  the  books  of  the  Com- 
pany, and  that  it  includes  all  dividends,  whether  in  cash,  stock,  scrip  or 
of  any  other  character  or  description,  declared  by  said  Company  during 
the  year  ending  on  the  thirty-first  day  of  October,  A.  D.  1905. 

ROBERT  COLEMAN, 

Sworn  to  and  subscribed  before  me,  \  Treasurer. 

the  day  and  year  aforesaid.          J 

HENRY  PERKINS, 

Notary  Public. 

[L.   S.] 


FORMS   OF   REPORTS.  235 

Blanks  for  this  report  are  usually  sent  out  from  the 
Comptroller's  office  in  October.  The  form  is  prescribed  by 
the  Comptroller  and  if  blanks  are  not  received  they  may  be 
obtained  without  cost  by  applying  to  that  official.  The  pre- 
scribed form  must  be  used.  The  affidavit  of  either  the  presi- 
dent, vice-president,  secretary  or  treasurer  as  to  the  truth  of 
the  statements  therein  must  be  annexed  to  the  report,  the 
form  of  affidavit  being  prescribed  by  the  Comptroller.  The 
report  when  complete  is  merely  mailed  to  the  State  Comp- 
troller at  Albany.  No  riling  or  other  fees  need  be  paid. 

This  report  is  used  as  the  basis  for  fixing  the  franchise 
tax  and  must  be  filed  with  the  Comptroller  on  or  before  No- 
vember 1 5th  of  each  year.  It  must  give  the  condition  of  the 
corporation  at  the  close  of  business  on  October  3ist  preceding. 
The  statements  of  the  report  are  not  conclusive,  as  the  Comp- 
troller may  in  his  discretion  use  other  information  to  deter- 
mine the  amount  of  the  franchise  tax  of  any  particular  cor- 
poration, or  may  require  the  officers  of  the  corporation  to 
furnish  additional  information.  In  the  majority  of  cases, 
however,  the  franchise  tax  is  based  directly  upon  the  informa- 
tion given  in  this  report. 

For  failure  to  file  the  report,  a  penalty  is  imposed  of 
$100  and  $10  per  day  for  each  day  that  the  failure  continues. 
The  same  penalty  is  imposed  for  failure  to  file  any  special 
report  required  by  the  Comptroller  within  any  reasonable  time 
specified  by  him.  (See  §  175;  also  Tax  Law,  §§  189,  191.) 

The  company  making  the  foregoing  report  is,  as  a  manu- 
facturing corporation  employing  40  per  cent,  of  its  capital 
stock  in  manufacturing  within  the  state,  entitled  to  exemption 
from  the  franchise  tax.  To  secure  this  exemption  a  special 
statement  must  be  made,  directly  claiming  this  exemption  and 
stating  the  facts  which  justify  the  claim.  (See  Form  48.) 

In  the  present  instance  the  corporation  reporting  has  de- 
clared a  dividend  and  the  report  as  presented  is  therefore 
complete.  If  no  dividend  had  been  declared,  an  additional 


236  NEW    YORK    CORPORATIONS. 

statement  and  affidavit,  stating  that  fact  and  appraising  the 
value  of  the  capital  stock,  would  have  been  necessary.  This 
statement  and  affidavit  accompany  the  blank  for  Comptroller's 
report  as  a  part  of  it  but  are  not  filled  out  if  any  dividend 
has  been  declared  during  the  preceding  year.  They  are  in 
form  as  follows: 

Form  46.     Report  to  Comptroller.  Appraisement  of  Stock. 

STATE  OF  NEW  YORK,    ) 
County  of  New  York.  )    ' 

On  this  second  day  of  November,  1905,  before  me,  the  subscriber,  a 
Notary  Public,  personally  appeared  Robert  Harris,  Treasurer  and  Edward 
Jones,  Secretary  of  the  Union  Tea  Company,  who  being  duly  sworn,  did 
say  that  the  amount  of  Capital  paid  in  of  said  Company  is  $70,000  and 
that  said  Company,  declared  no  dividend  in  cash,  stock,  scrip,  or  of  any 
other  description  during  the  year  ending  October  31,  1905,  save  those 
herein  reported,  and  that  they  will,  according  to  their  best  knowledge  and 
belief,  appraise  the  Capital  Stock  of  said  Company,  at  its  actual  value  in 
cash,  not  less,  however,  than  the  average  price,  which  said  stock  sold  for 
during  the  said  year. 

ROBERT  HARRIS, 

Treasurer. 
Sworn  to  before  me  the  day  |  EDWARD  JONES, 

and  year  aforesaid.  }  Secretary. 

(  NOTARIAL  )  RICHARD  TOMPKINS, 

\      SEAL.     /  Notary  Public. 

We,  the  undersigned,  being  the  Treasurer  and  Secretary  of  the  above 
Company,  do  certify  that  in  pursuance  of  our  aforesaid  oaths  we  have 
estimated  and  appraised  the  Capital  Stock  of  said  Company  at  its  actual 
value,  in  cash,  as  follows :  One  hundred  shares  at  forty-five  dollars,  fifty 
cents  per  share,  amounting  in  the  whole  to  forty-five  hundred  and  fifty 
(4550)  dollars. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  the  day  and 
year  aforesaid. 

ROBERT  HARRIS, 

Treasurer. 
EDWARD  JONES, 

Secretary. 


When  actual  sales  of  stock  have  been  made  during  the 
year,  or  in  preceding  years,  the  approximate  cash  value  of  the 
capital  stock  is,  as  a  rule,  easily  determined.  If,  however,  as 
is  not  infrequently  the  case  with  corporations  paying  no  divi- 


FORMS   OF   REPORTS.  237 

dends,  no  actual  cash  sales  have  been  made,  the  cash  value  of 
the  stock  may  become  very  difficult  of  determination.  In  such 
case,  as  the  market  value  of  the  stock  is  to  be  determined,  it 
must  be  based  on  the  value  of  the  entire  property  and  busi- 
ness owned  by  the  corporation. 

Form  47.     Report  to  Comptroller.    Foreign  Corporation. 


Report  should  be  made  on  or  before  November  I5th.  Tax  is  payable 
on  or  before  January  I5fh,  following. 

To  the  Comptroller  of  the  State  of  New  York: 

As  Treasurer  of  the  Shelby  Steam  Shovel  Company,  I  make  the  fol- 
lowing report  of  such  Company  for  the  year  ending  October  3ist,  1905, 
pursuant  to  the  provisions  of  Chapter  908,  Laws  of  1896,  and  acts  amend- 
atory thereof. 

1.  This  Company  began  business  in  the  State  of  New  York  in  the 
month  of  June,  1899. 

2.  The  last  report  made  by  this  Company  to  the  Comptroller  of  the 
State  of  New  York  under  the  provisions  of  the  above  act  was  made  for 
the  year  ending  October  3ist,  1904. 

3.  Value  of  real  estate  and  of  interest  or  interests  in  real  property 
in  New  York  State,  and  where  situated,  $5,000.     Warehouse  at  429  Quail 
Street,  Albany,  New  York. 

4.  Organized  under  the  laws  of  the  State  of  New  Jersey. 

5.  Date  of  Organization  of  the  Company,  Jan.  14,  1889. 

6.  Total  authorized  Capital  of  Company $100,000 

7.  Whole  number  of  shares  of  stock  authorized /,ooo 

8.  Number  of  shares  of  stock  issued 750 

9.  Par  value  of  each  share $       100 

10.    Amount  paid  into  the  Treasury  of  the  Company  on  each 

share  $       100 

1 1. a.  Amount  of  Capital  paid  in  cash  or  property $  50,000 

b.  Amount  of  Capital  paid  in  good  will (\  10,000 

c.  Amount  of  Capital  paid  in  patents  or  copyrights $  15,000 

12.  Amount  of  Capital  upon  which  dividends  were  declared.  .$  75,000 

13.  Date  of  each  dividend  declared,  June  i,  1905. 

14.  Amount  of  each  dividend  declared $    <5,ooo 

15.  Rate  per  cent,  per  annum  of  dividends,  Eight  (8%)  per  cent. 

16.  The  business  transacted  by  this  Company  in  the  State  of  New 
York  for  the  year  ending  October  3ist,  1905,  was  as  follows :      (Giving 
nature  of  business  and  how  carried  on.) 

The  sale  of  steam  shovels  and  of  machinery  and  apparatus  used  in 
connection  therewith. 

17.  And  such  business  was  carried  on  at  the  following  named  place 
or  places:  (Give  street  and  number.) 

100  Broadway,  New  York  City. 

420  Quail  St.,  Albany,  New  York. 

NOTES. — The  answer  to  Question  3  should  be  the  net  interest.  If  the 
Company  has  more  than  one  kind  of  stock  it  should  be  stated  in  the  report. 


238  NEW    YORK    CORPORATIONS. 

18.  Nature  of  business  transacted  and  amount  invested  outside  New 
York  State: 

At  Newark,  New  Jersey,   manufacture  and  sale  of  Steam  Shovels 
and  connected  machinery.     Investment $  40,000 

19.  What  percentage  of  the  Company's  Capital  is  actually  employed 
in  manufacturing  in  the  State  of  New  York?    None. 


Remarks. . 


20.  Total  amount  of  sales  made  in,  through  all  offices,  and  by  our 
agents  or  officers  in  the  State  of  New  York,  for  the  year  ending  October 
3ist,  1905,  was  the  sum  of  $.250,000 

21.  The  actual  or  approximate  value  of  the  average  amount  of  stock 
in  trade,  carried  by  this  Company  in  the  State  of  New  York,  during  the 
year  ending  October  31  st,  1905,  was  the  sum  of  $  25,000 

22.  And  such  stock  was  located  (Give  street  and  number),  429  Quail 
St.,  Albany,  New  York. 

23.  The  value  of  stock  in  trade  manufactured  in  the  State  of  New 
York  by  this  Company  for  the  year  ending  October  3ist,   1905,  was  the 
sum  of  $ 

24.  The  value  (approximate)  of  personal  property,  other  than  stock 
in  trade,  used  by  this  Company  in  the  State  of  New  York  during  the  year 
ending  October  3ist,  1905,  was  the  sum  of $    ^,000 

25.  Average  of  monthly  bank  balances  carried  in  the  State  of  New 
York  for  the  year  ending  October  3ist,  1905 $    2,850 

26.  Total  amount  of  rentals  paid  in  New  York  State  for  year  ending 
October  3ist,  1905  $    1,200 

27.  Average  amount  of  bills  and  accounts  receivable  in  New  York 
State  for  the  year  ending  October  3ist,  1905 $    8,000 

28.  Average  amount  of  stocks,  bonds,  loans  on  call,  or  other  financial 
securities  held  in  the  State  of  New  York,  by  the  Company  against  other 
corporations,   joint   stock   companies,   associations    or    individuals,    during 
the  year  ending  October  3ist,  1905 None. 

29.  And   held  by 

At 

30.  Total  salary  paid  to  persons  employed  by  this  Company  in  the 
State  of  New  York  for  the  year  ending  October  3ist,  1905 $    5,275 

JOHN  A.  SHELBY, 

Treasurer. 
(Affidavit  same  as  for  Domestic  Corporation.) 


The  report  of  a  foreign  corporation  to  the  Comptroller 
is  much  the  same  as  that  of  a  domestic  corporation  with  the 
addition  of  such  details  in  regard  to  the  amount  of  capital 
employed  and  the  business  transacted  in  the  state  as  are  neces- 
sary to  determine  its  proper  privilege  tax.  The  form  of  this 
report  is  prescribed  by  the  Comptroller  and  blanks  for  same 


FORMS   OF   REPORTS.  239 

are  supplied  by  him.  The  report  is  mailed  to  the  Comptroller 
at  Albany.  No  fees  are  required.  The  same  regulations  and 
penalties  apply  to  this  report  as  to  the  report  of  domestic  cor- 
porations to  the  Comptroller.  (See  §  175.) 

Form  48.     Statement  to  Comptroller.     To  Secure  Exemp- 
tion as  Manufacturing  Corporation. 

Replies  to  questions  should  be  explicit. 

STATEMENT  and  affidavit  of  Thomas  R.  Edwards,  President  of  Stand- 
ard Biscuit  Company  claiming  exemption  from  making  reports,  and  the 
payment  of  tax  as  levied  and  assessed  under  Chapter  908,  Laws  of  New 
York,  1896,  and  acts  amendatory  thereof. 

1.  Full  name  of  the  corporation,  joint  stock  company  or  association. 
Standard  Biscuit  Company. 

2.  Name  and  title  of  officer  making  this  statement. 
Thomas  R.  Edwards,  President. 

3.  Under  what  Law  of  what  State  or  country  was  the  corporation, 
joint  stock  company  or  association  incorporated,  organized  or  formed? 

New  York. 

4.  Date  of  organization. 
January  4th,  1905. 

5.  For  what  purpose?     (To  be  stated  as  shown  in  charter.) 

"  The  business  and  objects  of  said  corporation  are  the  manufacture 
and  sale  of  biscuits,  crackers,  confectionery  and  other  food  products." 

6.  Nature  of  business  now  transacted. 

The  company  is  engaged  in  the  manufacture  of  biscuits  and  fancy 
crackers  at  507  Greenwich  St.,  New  York  City,  and  in  disposing  of  the 
same  through  travelling  salesmen  throughout  the  United  States. 

7.  If  a  mining  company,  state  where  the  mines  are  located. 

8.  If  an  agricultural  company,  state  where  the  company's  plant  is 
situated. 

9.  If  a  manufacturing  company,  state  where  factory  is  located. 
507  Greenwich  St.,  New  York  City. 

10.  Does   the  company  maintain,   own  and  operate  the  mine,  plant 
or  factory? 

The  company  owns  its  factory  property  in  fee  simple. 

11.  Does  the  company  actually  manufacture  within  the  State  of  New 
York,  all  the  goods,  wares  or  merchandise  sold  by  the  company  in  its 
business  in  this  State? 

Yes. 

12.  Does  the  company  lease  to  other  parties  the  right  of  manufacture 
of  goods  sold  by  it? 

No. 

13.  Does  the  company  cause  any  of  its  products  to  be  manufactured 
by  any  other  person,   partnership,    association   or   corporation   within   or 
without  this  State,  that  it  uses  or  sells  in  this  State? 

No. 


24O  NEW    YORK    CORPORATIONS. 

14.  Location  of  main  business  office  of  the  company. 
507  Greenwich  St.,  New  York  City. 

15.  What  percentage  of  the  company's  entire  capital  is  actually  em- 
ployed in  New  York  State  in 

1.  Conducting  its  manufacturing;  95%. 

2.  The  operation  of  mining  ores? 

REMARKS  : — The  entire  manufacturing  operations  of  the  company  are 
carried  on  within  the  State  of  New  York. 

STATE  OF  NEW  YORK,    | 
County  of  New  York.  J    ' 

Thomas  R.  Edwards,  President  of  the  Standard  Biscuit  Company, 
being  duly  sworn,  deposes  and  says  that  the  answers  to  the  above  questions 
as  set  down  by  him  and  remarks,  are  true  and  correct. 

THOMAS  R.  EDWARDS. 
Sworn  and  subscribed  before  me  this  | 
i?th  day  of  January,  1906.  J 

f  NOTARIAL  )  ROBERT  HENDRIX, 

I     SEAL.     /  Notary  Public. 


This  statement  is  required  of  every  manufacturing,  min- 
ing or  laundry  corporation,  claiming  exemption  from  the  fran- 
chise tax.  The  statement,  must  show  that  at  least  40  per  cent, 
of  the  capital  of  the  corporation  is  employed  in  the  state  in 
furtherance  of  the  legitimate  business  of  the  corporation.  (See 
§§  149,  150;  also  Tax  Law,  §  183.) 

Local  Tax  Reports. 

The  form  of  local  reports  required  and  the  regulations 
under  which  they  are  made,  vary  in  different  parts  of  the  state. 
In  New  York  City  and  in  Buffalo,  no  preliminary  reports  are 
required  of  corporations  liable  to  taxation,  but  they  are  ten- 
tatively assessed  upon  their  entire  authorized  capitalization. 
If  the  corporations  are  satisfied  they  need  take  no  action  in 
the  matter  and  the  assessment  stands.  If,  however,  they  feel 
aggrieved,  application  must  be  made  for  a  revision  or  correc- 
tion of  the  original  assessment,  accompanied  by  a  report  of 
the  true  condition  of  the  corporation.  From  this  report  the 
tax  commissioners  determine  the  assessment  that  should  really 
be  made. 


FORMS   OF   REPORTS.  24! 

In  most  portions  of  the  state,  however,  the  usual  plan 
is  followed  of  requiring  a  prescribed  report  from  the  corpora- 
tion which  is  used  as  a  basis  for  assessment.  The  reports  re- 
quired in  Rochester  and  Syracuse  (See  Forms  4Qc  and  49d) 
are  of  this  nature. 

In  every  important  tax  district  of  the  state  printed  forms 
are  supplied  for  the  local  tax  reports  and  may  be  obtained 
from  the  local  assessors.  In  the  less  important  districts  blanks 
are  not  furnished.  The  general  form  given  below  will,  in  such 
cases,  be  found  convenient. 

No  fees  of  any  kind  are  required  in  connection  with  these 
local  tax  reports.  (See  Chap.  XVI.) 

Form  49.     Local  Tax  Report,     (a)   General  Form. 


REPORT  OF  THE 

HOWARD   IMPLEMENT   COMPANY 
To  the  Assessors  of  the  Town  of  Woodbury,  New  York. 


I,  Henry  M.  Wilson,  Treasurer  of  the  Howard  Implement  Company, 
a  corporation  organized  under  the  laws  of  the  State  of  New  York,  in 
pursuance  of  Section  27  of  the  Tax  Law  of  the  State  of  New  York,  do 
hereby  set  forth : 

1.  The  real  property  of  said  corporation  consists  of — 

Factory  in  Central  Valley,  the  amount  actually  paid  therefor  being, 
$5,000. 

2.  The  capital   stock  of  said  corporation   actually  paid  in   and   se- 
cured to  be  paid  in  is,  $50,000. 

The  amount  paid  therefrom  for  realty  is,  $5,000. 

The  amount  of  said  capital  stock  held  by  the  State  and  by  any  incor- 
porated literary  or  charitable  institution  is,  $2,500. 

3.  The  principal  office  of  the  Company  is  situated  in  Central  Valley, 
New  York. 

4.  The   direct   liabilities   of  the  corporation,   not  including  any   in- 
debtedness incurred  in  the  purchase  of  non-taxable  securities,  are,  $3,500. 

STATE  OF  NEW  YORK,  1         . 
County  of  Orange.    J 

I,  Henry  M.  Wilson,  the  Treasurer  of  the  said  Corporation,  being 
duly  sworn,  do  hereby  certify  that  the  foregoing  is  in  all  respects  a  just 


242  NEW    YORK    CORPORATIONS. 

and  true  statement  of  the  property  and  debts  of  the  Corporation  on  the 
second  Monday  of  January,  1906. 

HENRY  M.  WILSON. 

Sworn  to  before  me  this  2Oth  day     > 
of  February,  1906.  f 

FRANK  H.  HOWARD, 

f  NOTARIAL  \  Notary  Public  for 

\      SEAL.     /  Orange  County. 


Form  49.     Local  Tax  Report,     (b)  New  York  City. 

THE  CITY  OF  NEW  YORK. 

DEPARTMENT  OF  TAXES  AND  ASSESSMENTS. 
Main  Office,  280  Broadway,  Borough  of  Manhattan. 


The  Anchor  Silk  Company,  a  corporation  organized  under  the  laws 
of  the  State  of  New  York,  claiming  to  be  aggrieved  by  the  assessed  valu- 
ation of  its  property  for  the  year  1906,  makes  application  by  the  under- 
signed, one  of  the  officers  of  the  said  corporation,  to  have  the  same 
revised  and  corrected. 

HOWARD  W.  WELLS, 

Dated  January  isth,  1906.  Treasurer. 


STATEMENT  FOR  PURPOSE  OF  REVISION. 

Total  Gross  Assets,  including  Real  Estate  ................  $750,430.10 

Of  above  —  Real  Estate,  other  than  Franchise  ................  $300,000 

—  Value  Franchise  ........................................ 

—  Personal  Property  ............................  $450,430.70 

Capital  Stock  actually  paid  in,  or  secured  to  be  paid  in  ......  $350,000 

Amount  of   Surplus    ........................................  $^o,ooo 

Rate  of  Dividend  for  last  year,  or  last  Annual  Dividend  ..........  5% 

Amount  actually  paid  for  Real  Estate  owned  by  Corporation.  .$270,000 
Value  at  which  such  Real   Estate  is  carried  on  its  books 

as  an  Asset  .............................................  $300,000 

Value  at  which   such   Personal   Property   is  carried  on  its 

books  as  an  Asset  ....................................  $450,430.10 

Indebtedness  is  detailed  as  follows  : 

Amount  owing  for  Goods  Imported  by  above  Corporation 

from  foreign  countries  ...............................  $180,125.10 

Other  indebtedness  : 

Bills  due  and  payable,  $8,315.00. 

Notes  to  National  Park  Bank,  due  March  3d,  1906,  $102,000.00. 

Amount  of  the  above  indebtedness  contracted  or  incurred  in  the 
purchase  of  non-taxable  property  or  securities,  or  for  the  purpose  of 
evading  taxation,  None. 

Assessed  Value  of  Real  Estate  (describing  particularly  by  Ward  and 
Map  Numbers). 

780  Franklin  St.,  Ward  4,  Map  5,  Block  73,  $300,000. 


FORMS   OF   REPORTS.  243 

Amounts  invested  in  the  stocks  of  other  corporations  which  are  taxed 
upon  their  capital  $/o,ooo 

Amount  invested  in  U.  S.  Securities $  5,000 

Amount  invested  in  State  and  Municipal  Securities None. 

Cost  price  of  goods  imported  by  above  Corporation  from  foreign 
countries  on  hand  in  unbroken  original  packages $jo,ooo 

(If  the  stock  of  the  Company  is  worth  less  than  par,  state  actual  value, 
and  give  the  facts  under  oath  which  will  justify  such  estimate  of  its  value.) 

The  principal  office  or  the  place  of  transacting  the  financial  business 
of  the  said  Corporation  is  situated  in  the  Fourth  Ward  of  the  Borough 
of  Manhattan,  in  the  City  of  New  York,  at  No.  780  Franklin  Street. 

STATE  OF  NEW  YORK,    ) 
County  of  New  York.  V 

I,  Howard  W.  Wells,  the  Treasurer  of  said  Corporation,  being  duly 
sworn,  do  hereby  certify  that  the  foregoing  is  in  all  respects  a  just  and 
true  statement  of  the  property  and  debts  of  the  Corporation  on  the  second 
Monday  of  January,  1906. 

HOWARD  W.  WELLS. 
Sworn  to  before  me  this  I5th 

day  of  January,  1906. 

HARRIS  McLEAN, 

/  NOTARIAL  \  Notary  Public  in  and  for 

\      SEAL.     /  the  County  of  New  York. 


The  five 'boroughs  of  the  City  of  New  York  have  but 
one  board  of  assessors  and  therefore  constitute  a  single  tax 
district.  Assessments  are  made  on  the  second  Monday  in 
January.  As  a  preliminary  step  the  corporations  liable  to 
taxation  are  usually  assessed  upon  their  entire  authorized 
capitalization  without  regard  to  the  real  values  involved. 
Notice  of  this  assessment  is  then  sent  to  each  corporation,  to- 
gether with  a  blank  form  upon  which  the  corporation  may 
apply  for  a  revision  and  correction  of  the  assessment  if  ag- 
grieved thereby.  The  preceding  application  and  report  is  of 
this  nature. 

If  a  revision  is  desired  application  must  be  made  there- 
for before  March  3ist.  If  no  application  for  correction  is 
made,  the  assessment  becomes  final  on  that  date  and  review- 
able  only  on  application  to  the  courts.  The  tax  department 
will  readily  make  the  proper  corrections  where  the  original 
assessment  is  excessive,  if  the  required  application  is  made 
before  March  3ist. 


244 


NEW    YORK    CORPORATIONS. 


It  is  important  to  remember,  however,  that  the  tax  de- 
partment is  not  required  to  notify  tax  payers  of  the  amounts 
of  their  assessments.  Notice  is  usually  sent  merely  as  a  mat- 
ter of  convenience  to  all  parties,  but,  if  overlooked,  the  cor- 
poration failing  to  receive  such  notice  has  no  ground  of  com- 
plaint or  basis  for  asking  a  revision  of  the  assessment  after 
the  books  have  been  closed  on  the  3ist  day  of  March.  For 
this  reason  if  no  notice  of  assessment  is  received  within  a 
reasonable  time  after  the  second  Monday  in  January,  the  cor- 
poration should  take  steps  to  ascertain  if  it  is  on  the  assess- 
ment rolls,  and  if  so,  the  amount  of  its  assessment.  This 
may  readily  be  ascertained  by  application  to  the  tax  depart- 
ment. 

No  tax  bills  are  sent  out  when  the  tax  falls  due.  They 
may  be  obtained  by  application  to  the  tax  department,  how- 
ever, at  any  time  after  the  first  Monday  in  October.  (See 
Form  63,  "Corporate  Calendar,"  for  date  of  payment  of  taxes 
and  penalties  for  delay.) 

The  Buffalo  form  of  application  for  revision  and  correc- 
tion of  assessments  is  the  same  as  for  New  York  City. 

Form  49.     Local  Tax  Report,     (c)  Rochester. 


To  Assessors  of  the  City  of  Rochester,  N.  Y.: 

I,  Garfield  J.  Stewart,  Treasurer  of  Monarch  Cordage  Company. 
hereby  report,  in  pursuance  of  Section  27  of  the  Tax  Law  of  the  State 
of  New  York,  1896,  as  follows : 

Real  property  owned  by  such  corporation  consists  of: 


LOCATION  AND  DESCRIP- 
TION OF  PROPERTY 

TAX  DISTRICT 
If  City,  give  Ward,  Street 
and  No. 

Amount  paid 
for  same  in- 
cluding any 
improvem'ts 
orothersums 
expended  for 
same 

Asses  'd  value 
of  property 
outside  City 
of  Rochester 

Factory  Rochester  

730  State  St.,  i2th  Ward 

12,000  oo 

Factory  New  York  

413  Fulton  St.,  ist  Ward 

18  ooo  oo 

21  OOO  OO 

Total  

$30  ooo  oo 

$21  OOO  OO 

FORMS   OF   REPORTS.  245 

Second. — The  Capital  Stock  actually  paid  in  and  secured  to  be  paid 
in  is  $500,000. 

Third. — The  amount  of  Capital  Stock  of  this  Company,  held  by  the 
State,  and  by  any  incorporated  literary  or  charitable  institution,  is  $. . . . 

Fourth. — The  amount  of  all  Assets,  including  Real  Estate,  is  $7/J,- 
5/0.07. 

Fifth. — The  Liabilities  of  the  Company,  not  including  any  indirect 
liability  as  surety,  guarantor  or  indorser,  or  any  contingent  liability  of  any 
kind,  not  including  capital  stock;  and  not  including  any  indebtedness  in- 
curred in  the  purchase  of  non-taxable  property  or  securities,  amount  to 
$321,809.03. 

Sixth. — The  Ward  in  which  the  principal  office  or  place  of  transacting 
the  financial  business  of  said  Company  is  the  12th  Ward. 

Dated  this  ijth  day  of  June,  1905. 

GARFIELD  J.  STEWART, 

STATE  OF  NEW  YORK,  }  No.  730  State  Street. 

County  of  Monroe,    >  ss.: 
City  of  Rochester.      ) 

Garfield  J.  Stewart,  being  duly  sworn,  says  that  he  is  Treasurer  of  the 
Monarch  Cordage  Company;  that  he  subscribed  the  foregoing  report  as 
such  officer,  and  has  read  the  same  and  knows  the  contents  thereof;  that 
the  amount  of  the  liabilities  of  said  Company  as  stated  in  said  report  does 
not  include  any  indirect  liability  as  surety  guarantor  or  indorser,  or  any 
contingent  liability  of  any  kind,  and  does  not  include  the  capital  stock, 
nor  any  indebtedness  contracted  for  the  purchase  of  non-taxable  property 
or  securities,  and  that  such  report  is  in  all  respects  just  and  true. 

GARFIELD  J.  STEWART. 
Subscribed  and  sworn  to  before  me,  ) 
this  i$th  day  of  June,  1905.  ) 

f  NOTARIAL  \  REGINALD  BROWN, 

\      SEAL.      J  Notary  Public  for  Monroe  County. 

Form  49.     Local  Tax  Report,     (d)  Syracuse. 

OFFICE  OF 

CITY  ASSESSORS. 
CITY  HALL,  SYRACUSE,  N.  Y. 


STATEMENT  to  be  filled   out,   verified   and   filed   with   the   Board  of 
Assessors. 

1.  The  corporate  name  is  Syracuse  Salt  Company. 

2.  Its  principal  office  for  the  transaction  of  business  is  at  209  Kirk 
Block  in  the  City  of  Syracuse. 

3.  Its   operations   in  the   State   of   New  York  are  carried  on   from 
Syracuse. 

4.  The  real  estate  owned  by  the  Company  is  located  as  follows : 
910  Tenth  Avenue,  New  York  City. 


246  NEW    YORK    CORPORATIONS. 

5.  The  sums  paid  for  each  piece  thereof  is  as  follows: 
$390,000. 

6.  The  capital  stock  actually  paid  in  amounts  to $750,000 

7.  The  amount  of  capital  stock  secured  to  be  paid  in  amounts 

to  $^50,000 

8.  The  sums  paid  for  real  property  amounts  to $300,000 

9.  The  capital  stock  held  by  the  State  amounts  to $ 

10.     The  capital  stock  held  by  any  incorporated  literary  or  charitable 

institutions    amounts    to    $5,000,    and    is    held    by    the    following    named 
institutions : 

Rochester  Home  for  the  Aged. 

(Acknowledgment. ) 


CHAPTER  XXIV. 
SUNDRY  INSTRUMENTS. 


Application  for  Admission  to  State  by  Foreign  Corporation. 

Form    50.     (a)    Statement    and    Designation    of    Agent. 
Foreign   Corporation. 


SWISS-AMERICAN  CHOCOLATE  COMPANY. 
STATEMENT  AND  CERTIFICATE  OF  DESIGNATION. 


The  Swiss-American  Chocolate  Company,  a  foreign  corporation  or- 
ganized under  the  laws  of  the  State  of  Delaware,  applying  under  the  pro- 
visions of  Section  16  of  the  General  Corporation  Law  and  Section  432  of 
the  Code  of  Civil  Procedure  for  a  certificate  of  authority  to  do  business 
in  the  State  of  New  York,  does  hereby  make  a  .statement  and  designa- 
tion under  its  corporate  seal  as  follows : 

First.  The  business  or  objects  in  which  said  corporation  is  engaged 
and  which  it  purposes  to  carry  on  in  the  State  of  New  York,  are  as 
follows : 

To  prepare,  manufacture,  buy,  sell  and  generally  deal  in  chocolate, 
soluble  chocolate,  chocolate  products  and  preparations  and  other  foods, 
food  products  and  beverages  and  materials  used  therein  and  in  con- 
nection therewith,  and  to  do  all  lawful  things  convenient  and  necessary 
in  connection  with  the  said  business. 

Second.  Its  principal  place  of  business  within  the  State  of  New  York 
is  at  No.  148  Chambers  Street,  in  the  City  and  County  of  New  York. 

Third.  The  person  within  the  State  of  New  York  upon  whom  sum- 
mons upon  this  corporation  may  be  served,  or  other  process  or  paper, 
commencing  a  special  proceeding  against  the  corporation  before  a  court  or 
officer,  except  a  proceeding  to  punish  for  contempt,  or  where  special  pro- 
vision for  the  service  thereof  is  otherwise  made  by  law,  is  Sherman  Good- 
win, and  his  office  is  situated  at  No.  170  Broadway,  in  the  said  City, 
County  and  State  of  New  York. 

Fourth.  The  written  consent  of  the  said  Sherman  Goodwin,  the  per- 
son herein  designated,  and  a  sworn  copy  of  the  Certificate  of  Incorpora- 
tion of  the  Swiss-American  Chocolate  Company,  are  hereunto  annexed. 

SWISS-AMERICAN   CHOCOLATE   COMPANY, 

j  CORPORATE  )  By  BENJ.  ABBOTT, 

(       SEAL.       J  President. 

Attest  Seal, 

HENRY  OVERMANN, 
Secretary. 

247 


248  NEW   YORK    CORPORATIONS. 

"STATE  OF  DELAWARE,   )       ,  . 
County  of  Newcastle,  f    ' 

On  the  26th  day  of  January,  1906,  personally  appeared  before  me 
Benj.  Abbott,  to  me  well  known,  who  being  duly  sworn,  did  depose  and 
say  that  he  resided  in  Philadelphia,  Pennsylvania ;  that  he  is  the  president 
of  the  corporation  described  in  and  which  executed  the  foregoing  statement 
and  designation;  that  he  knew  the  seal  of  said  corporation  and  that  the 
seal  affixed  to  said  instrument  was  such  corporate  seal ;  that  it  was  so 
affixed  by  order  of  the  board  of  directors  of  said  corporation  and  that  he 
signed  his  name  thereto  by  like  order. 

BENJ.  ABBOTT. 
Sworn  to  and  subscribed  before  me, 

CHARLES  G.  GUYERE, 

Commissioner  of  Deeds 

•  for  the  State  of  New  York. 

(See  §  180;  also  G.  C.  L.,  §  16,  and  Code  of  Civ.  Pro.,  §  432.) 

In  the  form  given  the  acknowledgment  was  taken  be- 
fore a  New  York  commissioner  of  deeds  resident  in  Dela- 
ware. In  such  case,  no  certificate  showing  his  authority  to 
take  the  acknowledgment  is  necessary.  If,  however,  it  were 
taken  before  a  Delaware  notary,  the  latter's  authority  must  be 
shown  by  proper  certificate  from  the  county  clerk,  or  other 
officer  authorized  thereto.  To  the  statement  and  designation 
must  be  annexed  the  consent  of  the  designated  agent.  This 
is  as  follows : 


Form  50.     (b)  Consent  of  Agent.     Foreign  Corporation. 

CONSENT  OF  SHERMAN  GOODWIN 

TO 
DESIGNATION. 

I  hereby  consent  to  my  designation  as  the  person  within  the  State  of 
New  York  upon  whom  summons  against  the  Swiss-American  Chocolate 
Company  may  be  served,  or  other  process  or  paper,  commencing  a  special 
proceeding  against  the  said  corporation  before  a  court  or  officer,  except  a 
proceeding  to  punish  for  contempt,  or  where  special  provision  for  the 
service  thereof  is  otherwise  made  by  law. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  this  27th  day 
of  January,    1906. 

SHERMAN  GOODWIN. 


SUNDRY   INSTRUMENTS.  249 

STATE  OF  NEW  YORK,   * )       . 
County    of    New    York.  ) 

On  this  27th  day  of  January,  1906,  before  me  personally  came  Sher- 
man Goodwin,  to  me  known  and  known  to  me  to  be  the  individual  de- 
scribed in  and  who  signed  the  foregoing  consent,  and  acknowledged  to 
me  that  he  executed  the  same  for  the  purposes  therein  set  forth. 

WILLIAM  S.  PETTY, 
Commissioner  of  Deeds  No.  3, 
New  York  City. 

(See  Code  of  Civ.  Pro.,  §  432.) 

A  sworn  copy  of  the  certificate  of  incorporation  must  be 
attached  to  the  "Statement  and  Designation."  This  need  not 
be  certified  by  the  Secretary  of  State  of  the  home  state,  but 
must  in  all  cases  be  sworn  to  by  one  of  the  officers  of  the  cor- 
poration. This  affidavit  should  be  on  the  same  sheet  as  the 
certificate  or  be  attached  to  it.  The  form  of  affidavit  may  be 
as  follows: 

Form  50.     (c)  Affidavit  to    Certificate   of  Incorporation. 
Foreign  Corporation. 


STATE  OF  DELAWARE,  )         . 
County  of  Newcastle,  j 

Henry  Overmann,  being  duly  sworn,  deposes  and  says  that  he  is  the 
Secretary  of  the  Swiss-American  Chocolate  Company,  a  corporation  or- 
ganized under  the  laws  of  the  State  of  Delaware  and  that  the  foregoing 
instrument  is  a  true  and  correct  copy  of  the  Certificate  of  Incorporation  of 
said  corporation. 

HENRY  OVERMANN. 
Sworn  to  before  me  this  i6th  ) 
day  of  January,  1906.         ) 

CHARLES  G.  GUYERE, 
COM.   I  Commissioner  of  Deeds 

for  the  State  of  New  York. 


j  COM.   ) 

(  SEAL    f 


(See  "Table  of  Fees,"  page  347.) 

The  various  papers  shown  in  Form  50  (a-c)  together 
with  a  copy  of  the  charter  should  be  sent  to  the  Secretary  of 
State,  accompanied  by  the  required  fees.  (See  §  180.)  If 
they  are  in  proper  form,  he  will  issue  a  certificate  of  authority. 


250  NEW    YORK    CORPORATIONS. 

Agency  Changes.     Foreign  Corporation. 

Form  51.     (a)     Revocation     and     New     Designation    of 
Agent.     Foreign  Corporation. 

WATSON  TYPEWRITER  COMPANY. 


REVOCATION  AND  NEW  DESIGNATION  OF  AGENT 

Under  Section  16  of  the  General  Corporation  Law  and  Section  432  of  the 
Code  of  Civil  Procedure. 


The  Watson  Typewriter  Company,  a  stock  corporation  organized 
under  the  laws  of  the  State  of  West  Virginia,  hereby  certifies : 

That  said  corporation  has  heretofore  designated  Patrick  Smythe  as  its 
agent  to  receive  personal  service  of  summons  upon  the  said  corporation 
within  the  State  of  New  York. 

That  said  corporation  does  hereby  revoke  and  recall  the  said  designa- 
tion and  in  place  and  stead  of  the  said  Patrick  Smythe,  does  hereby 
designate  Henry  R.  Armour,  whose  written  consent  to  such  designation 
is  hereto  annexed,  as  the  person  within  the  State  of  New  York  upon 
whom  summons  or  other  process  commencing  a  special  proceeding  be- 
fore any  court  or  officer  may  be  served,  except  a  proceeding  to  punish  for 
contempt  and  except  where  special  provision  for  the  service  thereof  is 
otherwise  made  by  law. 

That  the  office  of  the  said  Henry  R.  Armour  is  at  393  Canal  Street, 
in  the  City  and  State  of  New  York,  the  place  where  said  corporation  has 
its  principal  place  of  business  within  the  State. 
j  CORPORATE  [  WATSON  TYPEWRITER  Co., 

|       SEAL.      f  By  FRANK  WALTHEW, 

President. 
Attest  Seal: 

HORACE  D.  MANNING, 
Secretary. 

(Acknowledgment  as  in  Form  Soa.) 


This  must  be  tiled  with  the  Secretary  of  State.  No  fees 
are  required.  The  consent  of  the  designated  agent,  as  in 
Form  50 (b),  must  be  attached. 


SUNDRY  INSTRUMENTS.  25! 

Form  51.     (b)  Certificate  of  Change  of  Office.     Foreign 
Corporation. 


BELLEVILLE  REALTY  CORPORATION  OF  NEW  JERSEY. 


Certificate  of  Change  of  New  York  Office 
Under  Section  432  of  the  Code  of  Civil  Procedure. 


I,  Ernest  Bryan,  heretofore  on  the  pth  day  of  July,  1903,  duly  desig- 
nated by  certificate  filed  in  the  office  of  the  Secretary  of  State  as  the 
person  upon  whom  summons  or  process  against  the  Belleville  Realty 
Corporation  of  New  Jersey  may  be  served  within  the  State  of  New  York, 
do  hereby  certify  that  I  have  removed  my  office  from  165  Broadway, 
New  York,  the  location  specified  in  the  said  certificate,  to  203  Broadway 
in  the  same  City  and  that  from  and  after  the  date  of  this  present  instru- 
ment, summons  or  process  against  the  said  Belleville  Realty  Corporation 
may  be  served  upon  me  as  the  designated  agent  of  said  corporation,  in 
my  said  office  at  203  Broadway,  New  York. 

In  Witness  Whereof,  I  have  hereunto  affixed  my  hand  and  seal 
this  3Oth  day  of  January,  1906. 

ERNEST  BRYAN.     [L.  s.] 

STATE  OF  NEW  YORK,        j     .  . 
County    of     New     York,   f 

On  this  3Oth  day  of  January,  1906,  before  me  personally  appeared 
Ernest  Bryan,  to  me  known  and  known  to  me  to  be  the  individual  de- 
scribed in  and  who  executed  the  foregoing  certificate  and  acknowledged 
to  me  that  he  executed  the  same  for  the  uses  and  purposes  therein  set 
forth. 

JOHN  B.  McCoNNELL, 

f  NOTARIAL  \  Notary  Public, 

1      SEAL.     J  New  York  County. 

(G.  C.  L.,  §  16;  Code  of  Civil  Proc.,  §  432.) 

This  certificate  must  be  filed  in  the  office  of  the  Secretary 
of  State.     No  filing  fees. 

Charter  Amendment. 

Form  52.     Change  of  Name,     (a)   Resolution  of  Directors 
Authorizing  Change. 


Resolved,  That  the  corporate  name  of  this  Company  be  changed  from 
"Cranford  Publishing  Company"  to  "Royston  Press  Company"  and  that 


252  NEW   YORK    CORPORATIONS. 

due  application  be  made  to  the  Supreme  Court  for  authority  therefor 
and  that  the  President  and  Counsel  of  the  Company  be  empowered  to  do 
ai)  things  requisite  to  etfect  such  change. 


The  procedure  for  change  of  name  is  formal  and  some- 
what complicated.  It  will  be  found  outlined  in  detail  in  §  72, 
subdiv.  i. 

Form  52.     Change  of  Name,     (b)  Publication  Notice. 


NOTICE  IS  HEREBY  GIVEN  that  the  Cranford  Publishing  Com- 
pany, a  domestic  corporation,  having  its  principal  office  in  the  Borough 
of  Manhattan,  City,  County  and  State  of  New  York,  will  apply  to  the 
Supreme  Court  of  the  State  of  New  York,  at  a  Special  Term,  Part  I 
thereof,  to  be  held  in  the  County  Court  House  in  the  County  and  City 
of  New  York,  on  the  1st  day  of  March,  1906,  at  10 130  o'clock  in  the  fore- 
noon of  that  day,  or  as  soon  thereafter  as  counsel  can  be  heard,  for  an 
order  authorizing  said  corporation  to  change  its  corporate  name  to  Roys- 
ton  Press  Company. 

Dated  New  York,  January  I5th,  1906. 

CRANFORD  PUBLISHING  COMPANY, 
BY  JAMES  BURR, 

President. 
HOLMES  &  CHURCHILL, 

Attorneys  for  Petitioner, 

loo  Broadway,  New  York  City. 

(See  §  72,  subdiv.  i  for  publication  requirements.) 
Form  52.     Change  of  Name,      (c)   Petition. 


SUPREME  COURT,  NEW  YORK  COUNTY. 

IN    THE    MATTER    OF    THE    APPLICATION      1 

OF  THE 

CRANFORD  PUBLISHING  COMPANY  FOR  Au-  > 
THORITY  TO  CHANGE  ITS  NAME  TO  THE  NAME  | 
OF  "  ROYSTON  PRESS  COMPANY." 

To  the  Supreme  Court,  New  York  County: 

The  petition  of  the  Cranford  Publishing  Company  respectfully  shows 
to  this  court  as  follows : 

That  it  is  a  domestic  stock  corporation  incorporated  under  the  Busi- 
ness Corporations  Law  of  the  State  of  New  York  and  having  its  prin- 
cipal office  and  place  of  business  in  the  Borough  of  Manhattan,  in  the 
City,  County  and  State  of  New  York. 


SUNDRY  INSTRUMENTS.  253 

That  it  is  engaged  in  the  buying,  selling,  printing,  publishing  and 
dealing  generally  with  books,  periodicals,  papers  and  printed  matter  and 
material  of  all  kinds  and  descriptions. 

That  its  present  name  is  the  Cranford  Publishing  Company.  That  it 
prays  that  it  may  be  authorized  to  adopt  the  name  of  the  Royston  Press 
Company. 

That  there  are  in  adjoining  states  sundry  printing  houses  having 
trade  names  nearly  resembling  petitioner's  present  name,  and  such  simi- 
larity of  names  causes  confusion  and  business  loss. 

That,  as  evidenced  by  the  certificate  of  the  Secretary  of  State  annexed 
hereto,  the  name  Royston  Press  Company  is  not  the  name  of  any  other 
corporation  incorporated  or  authorized  to  do  business  in  this  State,  nor 
so  nearly  resembling  it  as  to  be  calculated  to  deceive. 

That  this  application  has  been  duly  authorized  by  resolution  of  the 
petitioner's  board  of  directors  adopted  at  a  regular  meeting  held  in  the 
principal  office  of  the  corporation  on  the  Qth  day  of  January,  1906. 

Dated  February  27th,  1906. 

CRANFORD  PUBLISHING  COMPANY, 

f  CORPORATE  "I  BY  JAMES  BURR, 

\      SEAL.       )  President. 

HOLMES  &  CHURCHILL, 

Attorneys  for  Petitioner, 

Office  and  P.  O.  Address, 
loo  Broadway, 

Borough  of  Manhattan, 
New  York  City. 

STATE  OF  NEW  YORK,    )         . 
County  of  New  York.  ) 

James  Burr  being  first  duly  sworn,  deposes  and  says,  that  h.e  is  the 
president  of  the  Cranford  Publishing  Company,  the  petitioner  above 
named ;  that  he  has  read  the  foregoing  petition,  and  knows  the  contents 
thereof;  that  the  same  is  true  of  his  own  knowledge;  that  the  seal  affixed 
to  said  petition  is  the  corporate  seal  of  the  said  Company  and  was  affixed 
thereto  by  order  of  the  board  of  directors  of  said  Company  and  that 
he  signed  said  petition  on  behalf  of  said  Company,  by  the  like  order. 

JAMES  BURR. 

Sworn  to  before  me  this  27th  day    ) 
of  February,  1906.  J 

MALCOLM  CUTHBERT, 

f  NOTARIAL  \  Notary  Public  for 

\      SEAL.      /  New  York  County,  No.  79. 

(See  Code  of  Civ.  Proc.,  §§  2411-2415.) 

The  order,  as  given  below,  is  filed  and  recorded  in  ac- 
cordance with  its  terms,  in  the  office  of  the  county  clerk,  and 
a  certified  copy  thereof  filed  in  office  of  Secretary  of  State. 
Fees  to  county  clerk,  6  cents  for  filing,  10  cents  per  folio  for 
recording  and  8  cents  per  folio  for  certified  copy.  No  fees  to 
Secretary  of  State  %for  filing.  Affidavit  of  publication  is  filed 


254  NEW    YORK    CORPORATIONS. 

and  recorded  in  the  office  of  the  Secretary  of  State — record- 
ing fees,  15  cents  per  folio — and  also  in  the  office  of  the  county 
clerk.  Fees  to  county  clerk :  filing,  6  cents ;  recording,  10  cents 
per  folio.  (See  §  72};  also  Form  5/d  for  form  of  affidavit.) 

Form  52.     Change  of  Name,      (d)  Order. 


AT  A  SPECIAL  TERM  OF  THE  SUPREME  COURT  OF  THE 
STATE  OF  NEW  YORK,  held  at  Part  I  thereof,  in  the  County  Court 
House,  in  the  Borough  of  Manhattan,  City  of  New  York,  on  the  1st  day 
of  March,  1906.  Present :  Hon.  James  Fitzgerald,  Justice. 

IN    THE    MATTER    OF    THE    APPLICATION       ^ 

OF  THE 

CRANFORD    PUBLISHING    COMPANY    FOR    AU- 
THORITY TO  CHANGE  ITS  NAME  TO  THE  NAME   j 
OF  "  ROYSTON  PRESS  COMPANY/' 

Upon  reading  and  filing  the  petition  of  the  "  Cranford  Publishing 
Company,"  a  domestic  stock  corporation,  duly  verified  by  James  Burr,  its 
president,  wherein  said  petitioner  prays  for  an  order  authorizing  it  to  as- 
sume another  corporate  name,  to  wit,  "  Royston  Press  Company  "  and  upon 
filing  the  certificate  of  the  Secretary  of  State  annexed  thereto,  certifying 
that  the  name  which  said  corporation  proposes  to  assume  is  not  the  name 
of  any  other  domestic  corporation,  or  a  name  which  he  deems  so  nearly 
resembling  it  as  to  be  calculated  to  deceive,  and  upon  filing  due  proofs 
by  affidavits,  showing  that  notice  of  the  presentation  of  said  petition  has 
been  duly  published  for  six  weeks  in  the  "  New  York  Times  "  and  in  the 
"  Evening  Post,"  both  of  which  are  newspapers  published  in  the  City  and 
County  of  New  York,  in  which  city  and  county  such  corporation  has  its 
principal  office,  and  the  court  being  satisfied  by  said  petition  and  by  the 
affidavits  and  certificate  presented  therewith,  that  the  petition  is  true,  and 
that  there  is  no  reasonable  objection  to  the  change  of  name  proposed, 
and  that  the  petition  has  been  duly  authorized  and  that  notice  of  the 
presentation  of  the  petition,  as  required  by  law,  has  been  made ; 

Now,  on  motion  of  Holmes  &  Churchill,  attorneys  for  said  petitioner, 
no  one  opposing,  it  is 

Ordered,  that  said  petition  be,  and  the  same  hereby  is  granted,  and 
that  the  petitioner  herein,  the  Cranford  Publishing  Company,  be  and  it 
hereby  is  authorized  to  assume  another  corporate  name,  to  wit,  the  name 
"  Royston  Press  Company "  on  and  after  the  i6th  day  of  April,  1906 , 
and  it  is  further  ordered  and  directed  that  this  order  be  entered  and  the 
papers  on  which  it  is  granted  be  filed,  within  ten  days  from  the  date 
hereof,  in  the  office  of  the  Clerk  of  the  County  of  New  York,  the  county 
in  which  the  certificate  of  incorporation  of  said  corporation  is  filed,  and 
that  a  certified  copy  of  this  order,  within  ten  days  after  the  entry  thereof, 
be  filed  in  the  office  of  the  Secretary  of  State;  and  further  that  a  copy  of 
this  order  be  published  once  a  week  for  four  successive  weeks  in  the  New 
York  Law  Journal,  beginning  within  ten  days  after  the  entry  hereof. 

Enter  J.  F.,  J.   S.  C. 

(See  Code  Civ.  Proc.,  §§  2411-2415.) 


SUNDRY  INSTRUMENTS.  255 

Charter  Amendment. 

Form  53.     Change  of  Principal  Office,     (a)  Written  Con- 
sent of  Stockholders. 


STANFORD  STOVE  COMPANY. 
Change  of  Principal  Office. 


We,  the  undersigned,  being  all  of  the  stockholders  of  the  Stanford 
Stove  Company,  duly  incorporated  under  the  Business  Corporations  Law 
of  the  State  of  New  York,  hereby  agree  and  consent  that  the  principal 
office  and  place  of  business  of  said  corporation  be  changed  from  its  original 
location  in  the  Borough  of  Manhattan,  in  the  City,  County  and  State  of 
New  York,  to  the  City  of  Newburgh,  County  of  Orange  and  State  of 
New  York. 

In   Witness   Whereof,    we   have  hereunto   affixed   our   signatures 
this   15th  day  of  January,   1906. 

WILLIAM  B.  ANDERSON,  owning  20  Shares. 

JAS.   C.   CALDWELL,  .     20 

JACKSON   POWERS,  10 

JOHN  AMES  MORRIS,  20 

WARREN  V.  ALLAN,  50 

THOS.   S.  POWELL.  20 

CHARLES  C.  BOWEN,  10 
STATE  OF  NEW  YORK,    \ 
County  of  New  York.  / 

On  this  15th  day  of  January,  1906,  before  me  personally  came  Wil- 
liam B.  Anderson,  Jas.  C.  Caldwell,  Jackson  Powers,  John  Ames  Morris, 
Warren  V.  Allan,  Thos.  S.  Powell  and  Charles  C.  Bowen,  to  me  known 
and  known  to  me  to  be  the  individuals  described  in  and  who  executed  the 
foregoing  instrument,  and  they  severally  acknowledged  to  me  that  they 
executed  the  same. 

HOWARD  MAGNON, 

f  NOTARIAL  \  Notary  Public  in  and  for 

\      SEAL.      /  New  York  County. 

STATE  OF  NEW  YORK,     \ 
County  of  New  York,  f 

Robert  R.  McNeil,  being  duly  sworn,  deposes  and  says  that  he  is  the 
.  Secretary  of  the  Stanford  Stove  Company,  the  corporation  mentioned  in 
the  foregoing  instrument ;  that  he  has  charge  of  the  stock  book  of  the 
said  corporation  and  that  William  B.  Anderson,  Jas.  C.  Caldwell,  Jackson 
Powers,  John  Ames  Morris,  Warren  V.  Allen,  Thos.  S.  Powell  and 
Charles  C.  Bowen,  the  individuals  whose  names  are  signed  to  the  fore- 
going instrument,  are  the  holders  of  the  entire  outstanding  stock  of  the 
corporation. 

ROBERT  R.  MCNEIL, 

Sworn  to  before  me  this  isth  day    }  Secretary. 

of  January,  1906.  f 

HOWARD  MAGNON, 

f  NOTARIAL  \  Notary  Public  in  and  for 

I      SEAL.      J  New  York  County. 

(See  §  72f.) 


256  NEW    YORK    CORPORATIONS. 

This  consent  must  be  filed  in  the  office  of  the  Secretary 
of  State.  No  fees.  The  following  certificate  is  in  pursuance 
of  the  duly  filed  consent.  (See  S.  C.  L.,  §  59.) 

Form  53.     Change  of  Principal  Office,     (b)  Certificate  of 
Removal. 


STANFORD  STOVE  COMPANY. 

CERTIFICATE  OF  CHANGE  OF  PLACE  OF  BUSINESS. 

Under  Section  59  of  the  Stock  Corporation  Law. 


We,  the  undersigned,  the  President  and  Secretary  and  a  majority  of 
the  Directors  of  the  Stanford  Stove  Company,  a  domestic  stock  corpora- 
tion, for  the  purpose  of  changing  the  principal  office  and  place  of  business 
of  said  corporation,  do  hereby  certify  and  set  forth  as  follows : 

1.  The  name  of  said  corporation  is  "  Stanford  Stove  Company." 

2.  The  principal  office  and  place  of  business  was  originally  located 
in  the  Borough  of  Manhattan,  City,  County  and  State  of  New  York  and 
the  same  has  not  heretofore  been  changed. 

3.  It  is  desired  to  change  its  principal  office  and  place  of  business  to 
the  City  of  Newburgh,  County  of  Orange  and  State  of  New  York. 

4.  It  is  the  purpose  of  said  corporation  to  actually  transact  and  carry 
on  its  regular  business  from  day  to  day  at  such  place. 

5.  Such  change  of  the  principal  office  and  place  of  business  has  been 
authorized  by  the  unanimous   consent  of  the   stockholders   expressed   in 
writing,   duly  acknowledged  and  filed   in  the   office  of  the   Secretary  of 
State. 

6.  The  names  of  the  directors  of  said  corporation  and  their  respective 
places  of  residence  are  as  follows : 

William  B.  Anderson,  Rutherford,  N.  J. 

Jas.  C.  Caldwell,  119  West  79th  St.,  New  York. 

Jackson  Powers,  8  West  I26th  St.,  New  York. 

John  Ames  Morris,  55  2d  Ave.,  Williamsburg,  N.  Y. 

Thos.  S.  Powell,  Great  Neck,  L.  I.,  N.  Y. 

In  Testimony  Whereof,  we  have  hereunto  affixed  our  names,  this 
i8th  day  of  January,  1906. 

WILLIAM   B.   ANDERSON, 

President. 
ROBERT  R.  MCNEIL, 

Secretary. 
JAS.  C.  CALDWELL, 
JOHN  AMES  MORRIS, 
THOS.   S.   POWELL, 

Directors. 


SUNDRY  INSTRUMENTS.  257 

STATE  OF  NEW  YORK,  ) 
County  of  Kings.         f 

William  B.  Anderson,  Robert  R.  McNeil,  Jas.  C.  Caldwell,  John  Ames 
Morris  and  Thos.  S.  Powell,  being  severally  duly  sworn,  do  depose  and 
say,  and  each  for  himself  says,  that  the  said  William  B.  Anderson  is  the 
President  of  the  Stanford  Stove  Company,  that  the  said  Robert  R.  McNeil 
is  the  Secretary  of  said  Company,  and  that  Jas.  C.  Caldwell,  John  Ames 
Morris  and  Thos.  S.  Powell  are  a  majority  of  the  directors  of  said  Com- 
pany; that  he  has  read  the  foregoing  certificate  and  knows  the  contents 
thereof,  and  that  the  same  is  true. 

WILLIAM  B.  ANDERSON. 
ROBERT  R.  MCNEIL. 
JAS.  C.  CALDWELL. 

Sworn  to  before  me  this  i8th    )  JOHN  AMES  MORRIS. 

day  of  January,  1906.  f  THOS.    S.    POWELL. 

FRANK  W.  HOWARD, 

f  NOTARIAL  \  Notary  Public  for 

\      SEAL.      /  New  York  County. 


This  certificate  should  be  executed  in  triplicate.  One 
copy  must  be  filed  with  the  Secretary  of  State,  one  with  the 
clerk  of  the  county  from  which  the  removal  is  made  and  one 
in  the  office  of  the  county  clerk  of  the  new  location.  County 
clerks'  fees  are  in  each  case  6  cents  for  filing  and  10  cents 
per  folio  for  recording.  Fee  to  Secretary  of  State,  15  cents 
per  folio  for  recording.  (See  §§  /2f,  134.) 

If  the  removal  had  been  authorized  by  vote  of  the  stock- 
holders at  a  meeting,  the  following  paragraphs  would  take 
the  place  of  paragraph  5  in  the  preceding  form : 

Form  53.     Change  of  Principal  Office,     (c)  Vote  of  Stock- 
holders. 


5.  Such  change  of  the  principal  office  and  place  of  business  has  been 
authorized  by  a  vote  of  the  stockholders  of  said  corporation  at  a  special 
meeting  of  stockholders  called  for  that  purpose  and  held  in  the  principal 
office  of  the  corporation  in  the  Borough  of  Manhattan,  in  the  City  of 
New  York,  on  the  isth  day  of  January,  1906,  at  which  meeting  holders 
of  more  than  a  majority  of  the  outstanding  stock  of  the  corporation  being 
present  in  person  or  by  proxy,  the  following  resolution  was  duly  moved  and 
seconded  and  adopted  by  a  majority  vote  of  the  stock  of  the  corporation : 

Resolved,  That  the  principal  office  and  place  of  business  of 
the  Stanford  Stove  Company  be  removed  from  the  Borough  of 
Manhattan,  New  York  City,  to  the  City  of  Newburgh,  County  of 
Orange  and  State  of  New  York,  and  that  the  officers  and  directors 
of  this  corporation  are  authorized  and  instructed  to  carry  this 
resolution  into  effect. 


258  NEW    YORK    CORPORATIONS. 

Charter  Amendment. 

Form  54.     Classification  of  Stock,    (a)  Publication  Notice. 

NOTICE  OF  SPECIAL  MEETING. 


New  York,  Feb.  16,  1906. 

A  special  meeting  of  the  stockholders  of  the  Grayson  Milling  Com- 
pany will  be  held  in  the  office  of  the  Company,  56  Broad  Street,  New 
York  City,  March  2nd,  1906,  at  3.50  p.  m.,  for  the  purpose  of  acting  upon 
a  proposition  to  classify  the  capital  stock  of  the  corporation  into  common 
and  preferred  stock  so  that  its  authorized  capital  stock  of  One  Hundred 
Thousand  Dollars  ($100,000),  now  consisting  of  One  Thousand  (1,000) 
Shares  of  common  stock  of  the  par  value  of  One  Hundred  Dollars  ($100) 
each,  shall  consist  of  Five  Hundred  (500)  Shares  of  common  stock  and 
Five  Hundred  (500)  Shares  of  preferred  stock,  all  of  the  par  value  of 
One  Hundred  Dollars  ($100)  each,  said  preferred  stock  to  be  non-voting, 
to  bear  a  cumulative  preferential  annual  dividend  of  six  per  cent,  and  to 
be  redeemable  at  par  at  the  discretion  of  the  corporation  ten  years  from 
date  of  issue. 

By  order  of  the  HOWARD  GRAYSON, 

Board  of  Directors.  Secretary. 

(See  S.  C.  L.,  §  47.) 

The  notice  of  meeting  for  classification  of  stock  must  be 
published  once  each  week  for  two  weeks  preceding  the  date 
of  meeting  in  a  paper  published  in  the  county  of  the  principal 
office.  In  addition,  such  other  notice  must  be  given  as  is  pre- 
scribed by  the  by-laws  for  the  annual  meeting.  (See  §§ 
77-) 


Form  54.     Classification  of  Stock,     (b)  Certificate. 


GRAYSON  MILLING  COMPANY. 


CERTIFICATE  OF  CLASSIFICATION  OF  STOCK. 
Under  Section  47  of  the  Stock  Corporation  Law. 


We,  the  undersigned,  Horace  G.  Maxwell  and  Howard  Grayson, 
respectively  President  and  Secretary  of  the  Grayson  Milling  Company, 
a  corporation  organized  under  the  laws  of  the  State  of  New  York,  do 
certify  as  follows : 

That  the  authorized  capital   stock  of  said  corporation  is   One   Hun- 


SUNDRY  INSTRUMENTS.  259 

died  Thousand  Dollars  ($100,000),  divided  into  One  Thousand  (1,000) 
Shares  of  common  stock  of  the  par  value  of  One  Hundred  Dollars  ($100) 
each ;  and  that  of  said  capital  stock  Five  Hundred  (500)  Shares  are  issued 
and  Five  Hundred  (500)  Shares  are  unissued. 

That  a  special  meeting  of  stockholders  to  act  upon  a  proposition  to 
classify  the  stock  of  the  corporation  into  common  and  preferred  stock 
was  called  upon  notice  mailed  to  each  stockholder  of  the  company  at  his 
last  known  post-office  address  at  least  ten  days  before  the  date  of  said 
meeting,  and  published  in  the  "New  York  Times,"  a  newspaper  published 
in  the  county  in  which  the  principal  office  of  the  company  is  located,  at 
least  once  a  week  for  two  successive  weeks  immediately  preceding  such 
meeting,  the  notice  given  being  such  as  is  required  for  the  annual  meet- 
ing of  the  corporation. 

That  the  following  is  a  true  copy  of  the  said  notice : 

(Insert  Notice,  Form  54a.) 

That  at  the  designated  time  and  place,  stockholders  holding  more  than 
a  majority  of  the  outstanding  stock  of  the  corporation  assembled  in  per- 
son or  by  proxy. 

That  due  notification  of  the  meeting,  as  above  set  forth,  was  proven 
by  presentation  of  copies  of  the  "New  York  Times"  under  date  of  Febru- 
ary i6th  and  23rd  containing  the  above  notice,  and  by  the  affidavit  of  the 
Secretary  as  to  service  of  'said  notice  by  mail. 

That  the  following  resolution  was  then  presented  for  the  consideration 
of  the  meeting: 

"Resolved,  That  the  capital  stock  of  the  Company,  now  consist- 
ing of  One  Thousand  (1,000)  Shares  of  common  stock  of  the  par 
value  of  One  Hundred  Dollars  ($100)  each,  of  which  Five  Hundred 
(500)  Shares  is  issued  and  outstanding,  and  Five  Hundred  (500) 
Shares  is  unissued,  be  Classified  into  common  and  preferred  stock,  of 
each  an  equal  amount. 

"That  the  Five  Hundred  (500)  Shares  of  unissued  stock  shall 
be  the  preferred  stock '  so  created,  the  issued  stock  remaining  com- 
mon stock  without  preference,  as  before. 

"That  the  said  Five  Hundred  (500)  Shares  of  unissued  pre- 
ferred stock  shall  be  entitled  to  receive  a  cumulative  preferential  divi- 
dend of  six  per  cent,  per  annum,  payable  each  year  out  of  net  earn- 
ings before  any  dividend  is  paid  upon  the  common  stock  of  the  Com- 
pany, but  not  entitled  to  any  further  share  of  the  Company  profits. 

"That  said  preferred  stock  shall  not  entitle  the  holders  thereof 
to  vote  at  any  meeting  of  stockholders  of  the  Company. 

"That  said  preferred  stock  shall,  at  the  option  of  the  Company, 
be  redeemable  at  its  par  value  at  any  time  after  ten  '(10)  years  from 
the  date  of  its  issue." 

That  upon  vote  thereon,  said  resolution  received  the  favorable  vote 
of  Three  Hundred  and  Seventy-five  (375)  Shares  of  the  capital  stock, 
being  more  than  a  majority  of  the  outstanding  stock  of  the  Company,  and 
was  thereupon  declared  duly  adopted. 

In  Witness  Whereof,  we  have  made  and  signed  this  certificate  in 
duplicate,  this  3rd  day  of  March,    1906. 

HORACE  G.  MAXWELL, 

President. 

HOWARD  GRAYSON, 

Secretary. 


26O  NEW    YORK    CORPORATIONS. 

STATE  OF  NEW  YORK,    \ 
County  of  New  York,  j    ss" 

Horace  G.  Maxwell  and  Howard  Grayson,  being  duly  sworn,  do  de- 
pose and  say,  each  for  himself,  that  said  Horace  G.  Maxwell  is  Presi- 
dent and  said  Howard  Grayson  is  Secretary  of  the  Grayson  Milling  Com- 
pany, the  corporation  mentioned  in  the  foregoing  certificate  of  proceed- 
ings at  a  special  meeting  of  the  stockholders  thereof ;  that  he  was  present 
at  such  special  meeting;  that  he  has  read  the  foregoing  certificate  and 
knows  the  contents  thereof  and  that  the  same  is  true. 

HORACE  G.  MAXWELL. 
HOWARD  GRAYSON. 

Sworn  to  before  me  this  3rd  day      \ 
of  March,  1906.  f 

RALPH  P.  FAIRCHILD, 

(  NOTARIAL  \  Notary  Public  for 

I      SEAL.      J  New  York  County. 

(S.  C.  L.,  §  47.) 

This  certificate  must  be  filed  and  recorded  as  was  the 
original  certificate  of  incorporation.  Recording  fees  to  Secre- 
tary of  State,  15  cents  per  folio;  to  county  clerk,  10  cents  per 
folio.  Filing  fee  to  county  clerk,  6  cents.  (See  Form  55b.) 

Charter  Amendment. 

Form  55.     Increase  of  Stock,     (a)  By  Unanimous  Consent. 

THE  STANLEY  PRESS  COMPANY. 
UNANIMOUS  CONSENT  OF  STOCKHOLDERS  TO  INCREASE 

OF 
CAPITAL  STOCK. 


We,  the  undersigned,  being  all  of  the  stockholders  of  The  Stanley 
Press  Company,  a  domestic  stock  corporation,  hereby  agree  and  consent 
that  the  capital  stock  of  said  corporation  shall  be  increased  from  Twenty 
Thousand  Dollars  ($20.000)  divided  into  Two  Hundred  (200)  Shares  of 
the  par  value  of  One  Hundred  Dollars  ($100)  each,  to  a  capital  stock  of 
Thirty  Thousand  Dollars  ($30,000)  divided  into  Three  Hundred  (300) 
Shares  of  the  par  value  of  One  Hundred  Dollars  ($100)  each,  and  we  here- 
by authorize  and  empower  the  proper  officers  of  the  Company  to  do  all 
things  necessary  to  effect  the  same,  and  we  do  certify  and  set  forth : 

I.  That  the  amount  of  capital  stock  heretofore  authorized  is  $20,000 
divided  into  200  shares  of  the  par  value  of  $100  each,  and  that  all  of  said 
capital  stock  has  been  issued. 


SUNDRY  INSTRUMENTS.  26 1 

II.  That  the  amount  of  the  increased  capital  stock  is  $30,000  divided 
into  300  shares  of  the  par  value  of  $100  each. 

In  Witness  Whereof,  we  have  executed  this  instrument  in  dupli- 
cate this  i8th  day  of  January,  1906. 

ANDREW  MATSON,          owning  50  Shares. 
THOMAS  O'KANE,  "      10 

WILLIAM  O'MALLORY,         "      30 
FRANK  C.  FARLEY,  "      30 

WALTER  MOFFATT,  30 

CHAS.  A.  ULRICH,  25 

BERNARD  SUYDAM,  "      25 

STATE  OF  NEW  YORK,     ) 
County  of  New  York.  )    ' 

On  this  i8th  day  of  January,  1906,  before  me  personally  came  Andrew 
Matson,  Thomas  O'Kane,  William  O'Mallory,  Frank  C.  Farley,  Walter 
Moffatt,  Chas.  A.  Ulrich,  and  Bernard  Suydam,  to  me  known  and  known 
to  me  to  be  the  individuals  described  in  and  who  executed  the  foregoing 
instrument,  and  they  severally  acknowledged  to  me  that  they  executed 
the  same. 

DAN'L  DUNCAN, 

NOTARIAL  \  Notary  Public  in  and  for 

SEAL.      /  New  York  County. 


f 


STATE  OF  NEW  YORK, 
County  of  New  York. 

Harry  B.  Elkins,  being  duly  sworn,  deposes  and  says  that  he  is  the 
Secretary  of  The  Stanley  Press  Company,  the  corporation  mentioned  in 
the  foregoing  instrument ;  that  he  has  charge  of  the  stock  book  of  the 
said  corporation  and  that  Andrew  Matson,  Thomas  O'Kane,  William 
O'Mallory,  Frank  C.  Farley,  Walter  Moffatt,  Chas.  A.  Ulrich  and  Bernard 
Suydam,  the  individuals  whose  names  are  signed  to  the  foregoing  instru- 
ment, are  the  holders  of  the  entire  outstanding  stock  of  the  corporation. 

HARRY  B.  ELKINS, 
Sworn  to  before  me  this  i8th  |  Secretary. 

day  of  January,  1906.  ) 

BERNARD  MCFARLANE, 

/  NOTARIAL  \  Notary  Public  for 

I      SEAL.     /  New  York  County. 

(See  §  86;  also  S.  C.  L.,  §  45.) 

This  certificate  should  be  executed  in  duplicate.  One 
copy  should  be  sent  to  the  Secretary  of  State  together  with 
recording  fees  of  15  cents  a  folio.  At  the  same  time  the 
state  tax  of  50  cents  per  $1,000  of  increase  should  be  sent 
direct  to  the  State  Treasurer.  The  duplicate  copy,  together 
with  the  Treasurer's  receipt,  must  be  filed  with  the  clerk  of 
the  county  where  the  principal  office  is  situated.  The  fees  are 
6  cents  for  filing  and  10  cents  per  folio  for  recording. 


262  NEW    YORK    CORPORATIONS. 

If  the  stock  has  been  reduced,  a  third  paragraph  should 
be  added  to  the  certificate,  showing  the  total  corporate  indebt- 
edness and  it  should  be  accompanied  by  the  certificate  of  the 
State  Comptroller  to  the  effect  that  he  considers  the  reduced 
capital  sufficient  for  the  corporate  purposes.  Fee  to  State 
Comptroller  for  certificate,  $i.  (See  §  72,  "Amendments.") 

When  the  capital  stock  of  the  corporation  is  increased, 
and  the  whole  or  a  portion  of  this  increase  is  to  be  preferred 
stock,  the  increase  and  classification  may  be  effected  at  the 
one  meeting  as  in  the  following  case.  (See  S.  C.  L.,  §§  45, 
46,47.) 

Form  55.     Increase  of  Stock,     (b)  By  Vote  of  Stockholders. 

AUTOMATIC  LAMP  COMPANY. 


CERTIFICATE  OF  INCREASE  AND  CLASSIFICATION  OF  CAPITAL  STOCK. 


We,  the  undersigned,  Robert  Morrison  and  James  Bostwick,  respect- 
ively Chairman  and  Secretary  of  a  special  meeting  of  the  stockholders  of 
the  Automatic  Lamp  Company,  a  domestic  corporation,  held  January  5th, 
1906,  for  the  purpose  of  increasing  its  capital  stock,  and  Frank  L.  Sullivan 
and  Horace  K.  Jessup,  respectively  President  and  Secretary  of  the  said 
Company,  do  certify  as  follows : 

That  the  authorized  capital  stock  of  this  Company  is  Ten  Thousand 
Dollars  ($10,000),  divided  into  One  Hundred  (100)  Shares  of  common 
stock  of  the  par  value  of  One  Hundred  Dollars  ($100)  each,  all  of  which 
has  been  actually  issued. 

That  a  notice  of  a  special  meeting  of  stockholders  was  duly  published 
in  the  "New  York  Sun,"  a  newspaper  published  in  the  county  where  the 
principal  office  of  the  Company  is  situated,  at  least  once  a  week  for  two 
successive  weeks  before  the  date  fixed  for  such  meeting,  that  said 
notice  was  duly  signed  by  the  President  and  Secretary  of  the  Company 
and  that  the  following  is  a  true  copy  thereof : 

"A  special  meeting  of  the  stockholders  of  the  Automatic  Lamp 
Company  will  be  held  at  the  office  of  the  Company  at  No.  190  Broad- 
way, New  York  City,  on  January  loth,  1906,  at  3  o'clock  p.  m.,  to 
vote  upon  a  proposition  to  increase  the  capital  stock  of  this  Company 
from  Ten  Thousand  Dollars  ($10,000),  consisting  of  One  Hundred 
(100)  Shares  of  common  stock  of  the  par  value  of  One  Hundred 
Dollars  ($100)  each,  to  Twenty  Thousand  Dollars  ($20,000),  con- 
sisting of  Two  Hundred  (200)  Shares  of  the  par  value  of  One 
Hundred  Dollars  ($100)  each,  said  increase  to  consist  of  Fifty  (50) 
Shares  of  common  stock  and  Fifty  (50)  Shares  of  non-voting  pre- 
ferred stock  having  a  preferential  cumulative  dividend  of  six  per 
cent." 


SUNDRY  INSTRUMENTS.  26 


And  further  that  said  notice  was  served  personally  in  accordance  with 
the  requirements  of  §  45  of  the  Stock  Corporation  Law,  at  least  five  days 
before  such  meeting,  on  each  stockholder  of  record. 

That  stockholders,  in  person  or  by  proxy,  representing  at  least  two- 
thirds  of  the  capital  stock,  having  assembled  pursuant  to  said  notice,  the 
meeting  was  duly  organized,  the  said  Robert  Morrison  being  chosen  as 
Chairman  and  the  said  James  Bostwick  as  Secretary,  both  being  stock- 
holders of  the  Company. 

That  due  notification  of  said  meeting  to  the  stockholders  of  the  Com- 
pany was  proven  by  presentation  of  a  copy  of  the  aforesaid  notice,  together 
with  proof  of  publication  and  personal  service  of  the  same. 

That  the  following  resolution  was  presented  and  having  received  the 
favorable  vote  of  Ninety  (90)  Shares  of  the  capital  stock,  being  more  than 
two-thirds  thereof,  was  declared  duly  adopted. 

"  Resolved,  That  the  capital  stock  of  the  Company  be  increased 
from  its  present  amount  of  Ten  Thousand  Dollars  ($10,000),  con- 
sisting of  One  Hundred  (100)  Shares  of  the  par  value  of  One 
Hundred  Dollars '($100)  each,  to  Twenty  Thousand  Dollars  ($20,000), 
consisting  of  Two  Hundred  (200)  Shares  of  the  par  value  of  One 
Hundred  Dollars  ($100)  each. 

That  said  increase  of  capital  stock  amounting  to  Ten  Thousand 
Dollars  ($10,000),  be  so  classified  that  Five  Thousand  Dollars  ($5,000), 
consisting  of  Fifty  (50)  Shares  of  the  par  value  of  One  Hundred 
Dollars  ($100)  each  shall  be  common  stock  and  the  remaining  Fifty 
(50)  Shares  shall  be  preferred  stock  entitled  to  preference  and 
priority  over  the  entire  common  stock  of  said  Company  as  follows : 

The  holders  of  the  said  Fifty  (50)  Shares  of  preferred  stock  shall 
be  entitled  to  receive  a  cumulative  preferential  dividend  of  six  per 
cent,  per  annum,  payable  each  year  out  of  the  net  earnings  of  the 
Company  before  any  dividend  is  paid  to  the  common  stock  of  the 
Company. 

The  holders  of  said  preferred  stock  shall  have  no  right  to  vote 
at  any  meeting  of  the  stockholders  of  the  Company,  nor  shall  they 
be  entitled  to  any  further  share  in  the  profits  of  the  Company  after 
having  received  the  said  six  per  cent,  preferential  dividend." 

In  Witness  Whereof,  we  have  made  and  signed  this  Certificate 
this  loth  day  of  January,  1906,  in  duplicate. 
ROBERT  MORRISON, 

Chairman  of  Meeting. 
JAMES  BOSTWICK, 

Secretary  of  Meeting. 
FRANK  L.  SULLIVAN, 

President  Automatic  Lamp  Co. 
HORACE  K.  JESSUP, 

Secretary  Automatic  Lamp   Co. 
STATE  OF  NEW  YORK,      \ 
County    of    New    York.  J 

Robert  Morrison,  Chairman,  and  James  Bostwick,  Secretary,  being 
severally  duly  sworn,  each  for  himself,  deposes  and  says  that  he  has  read 
the  foregoing  certificate  subscribed  by  him  and  knows  its  contents,  and 
that  the  same  is  true. 

ROBERT  MORRISON. 

Sworn  to  before  me  this  loth  \  JAMES  BOSTWICK. 

day  of  January,  1906.  / 

HENRY  GORHAM, 

f  NOTARIAL  )  Notary  Public  for 

\      SEAL.      )  New  York  County. 


264  NEW    YORK    CORPORATIONS. 

STATE  OF  NEW  YORK,        )       . 
County    of    New    York,    f 

On  this   loth  day  of  January,    1906,  before  me  personally  appeared 
Robert  Morrison  and  James  Bostwick,  to  me  known  and  known  to  mo 
to  be  the  individuals  described  in  and  who  executed  the  foregoing  certifi- 
cate and  acknowledged  to  me  that  they  executed  the  same. 
(  NOTARIAL  \  HENRY  GORHAM, 

\      SEAL.      /  Notary   Public   for 

New  York  County. 

STATE  OF  NEW  YORK,      } 
County  of   New   York,    f  s' 

Frank  L.  Sullivan  and  Horace  K.  Jessup,  being  duly  sworn,  do  depose 
and  say,  each  for  himself,  that  said  Frank  L.  Sullivan  is  President  and 
said  Horace  K.  Jessup  is  Secretary  of  the  Automatic  Lamp  Company,  the 
corporation  mentioned  in  the  foregoing  certificate  of  proceedings  at  a 
special  meeting  of  the  stockholders  thereof;  that  he  was  present  at  such 
special  meeting;  that  he  has  read  the  foregoing  certificate  and  knows  the 
contents  thereof  and  that  the  same  is  true. 

RALPH  P.  FAIRCHILD, 

f  NOTARIAL  )  Notary  Public  for 

\      SEAL.      /  New  York  County. 

(See  §§  72b,  g,  and  77;  also  S.  C.  L.,  §§  45,  46,  47.) 

This  certificate  is  executed  in  duplicate;  one  copy  is  filed 
and  recorded  in  the  office  of  the  Secretary  of  State — record- 
ing fee,  15  cents  per  folio — and  one  copy  in  the  office  of  the 
county  clerk,  with  filing  fee  of  6  cents  and  recording  fee  of 
10  cents  per  folio.  Tax  to  State  Treasurer,  50  cents  on  each 
$1,000  of  increased  capital. 

If  notice  is  served  by  mail  such  notice  must  be  mailed 
at  least  two  weeks  before  the  meeting,  and  paragraph  5  con- 
cerning notice  must  be  changed  to  correspond  with  the  facts. 
(See  §  101  (e),  "Notice  of  Meeting  to  Increase  or  Decrease 
Capital  Stock.") 

The  above  form  is  somewhat  complicated  by  the  fact  that 
a  portion  of  the  increase  of  stock  is  preferred  and  the  cer- 
tificate must  therefore  not  only  conform  to  the  requirements 
of  a  certificate  of  increase  of  stock  but  of  classification  of 
stock  as  well.  If  the  certificate  were  merely  for  increase  of 
stock,  all  reference  to  the  president  and  secretary  of  the  com- 
pany would  be  dropped,  all  statements  as  to  the  preferred 
stock  would  be  omitted,  and  the  stock  vote  required  would  be 
merely  a  majority  instead  of  two-thirds. 


SUNDRY  INSTRUMENTS.  265 

Charter  Amendment. 

Form  56.     Increase  of  Number  of  Directors,      (a)  Notice 
of  Meeting. 

MODERN  REALTY  CORPORATION. 


NOTICE  OF  MEETING  TO  INCREASE  NUMBER  OF  DIRECTORS. 


A  Special  Meeting  of  the  Stockholders  of  the  Modern  Realty  Cor- 
poration will  be  held  in  the  office  of  the  Corporation,  No.  1135  Broadway, 
New  York  City,  at  4  o'clock  p.  m.,  on  the  2d  day  of  February,  1906,  to 
vote  upon  a  proposition  to  increase  the  number  of  directors  of  said  Cor- 
poration from  Five  to  Seven. 

THEODORE  STANTON, 

New  York  City,  Secretary. 

January  I7th,  1906. 

(See  §§  72e,  113;  also  S.  C.  L.,  §  21.) 

This  notice  must  be  served  on  the  stockholders  either 
personally  or  by  mail  two  weeks  before  the  time  of  meeting. 
(S.  C.  L.,  §  21.)  Proof  of  service  of  notice  must  be  filed  in 
office  of  corporation  at  or  before  the  time  of  meeting.  This 
proof  of  service  is  as  follows: 

Form  56.     Increase   of  Number  of  Directors,     (b)  Proof 
of  Service. 


STATE  OF  NEW  YORK,     } 
County  of  New  York,  j    ' 

Theodore  Stanton,  being  duly  sworn,  deposes  and  says  that  he  is  the 
Secretary  of  the  Modern  Realty  Corporation,  the  corporation  mentioned  in 
the  foregoing  notice,  and  that  on  the  I7th  day  of  January,  1906,  he 
served  said  notice  on  each  and  every  stockholder  of  said  Corporation 
by  mailing  to  the  last  known  post-office  address  of  each  of  said  stock- 
holders a  copy  of  said  notice  in  writing,  securely  sealed  and  the  postage 
prepaid. 

THEODORE  STANTON. 

Sworn  to  and  subscribed  before  me  this     ) 
i8th  day  of  January,  1906.  f 

GEORGE  WILLIAMS, 

/  NOTARIAL  \  Notary  Public, 

\      SEAL.      )  New  York  County. 


266  NEW    YORK    CORPORATIONS. 

Form  56.     Increase  of  Number  of  Directors,     (c)  Tran- 
script of  Proceedings. 


MODERN  REALTY  CORPORATION. 


INCREASE  OF  NUMBER  OF  DIRECTORS. 
TRANSCRIPT  OF  MINUTES  OF  MEETING. 


The  stockholders  of  the  Modern  Realty  Corporation  met  in  the  office 
of  the  corporation,  No.  1135  Broadway,  New  York  City,  at  4  o'clock  p.  m., 
on  the  2nd  day  of  February,  1906,  for  the  purpose  of  acting  upon  a  propo- 
sition to  increase  the  number  of  directors  from  five  to  seven. 

The  President  of  the  Corporation,  Mr.  Josiah  Thompson,  presided, 
and  Mr.  Theodore  Stanton,  the  Secretary  of  the  Corporation,  officiated 
as  such. 

The  following  stockholders,  each  owning  the  number  of  shares  set 
opposite  his  name,  were  present  in  person : 

NAME.  NO.   OF   SHARES. 

Josiah  Thompson    70 

Stephen  Ransom    20 

John  J.  McHugh  30 

M.  M.  Vail   10 

William  Daly   10 

James  Mullin   10 

Total    150 

Shares  not  represented    50 


Total  of  shares  issued  and  outstanding   200 

More  than  a  majority  of  the  entire  stock  of  the  corporation  being 
represented,  the  meeting  proceeded. 

Mr.  Stanton  presented  the  notice  of  the  meeting  accompanied  with 
his  affidavit  that  he  had  duly  served  the  said  notice  by  addressing  and 
mailing  a  copy  thereof  to  the  last  known  post-office  address  of  every 
stockholder  of  the  corporation.  Said  notice  and  affidavit  were  ordered 
received  and  filed. 

The  President  then  stated  that  the  meeting  was  ready  to  vote  upon 
the  question  for  which  it  had  been  called,  whereupon  on  motion  of  John 
J.  McHugh,  seconded  by  James  Mullin,  the  following  resolution  was 
offered : 

Resolved,  That  the  number  of  directors  of  the  Modern  Realty 
Corporation  be  increased  from  five  (5)  directors  to  seven  (7)  di- 
rectors. 


SUNDRY  INSTRUMENTS.  267 

Upon  motion  the  resolution  was  adopted  by  the  unanimous  vote  of 
all.  present,  the  stock  voted  in  favor  thereof  being  more  than  a  majority 
of  the  total  outstanding  stock  of  the  corporation. 

Whereupon  there  being  no  further  business  requiring  transaction, 
the  meeting  was  adjourned. 

THEODORE  STANTON, 

JOSIAH  THOMPSON,  Secretary. 

President. 

STATE  OF  NEW  YORK,    \ 
County  of  New  York.  J    ' 

Josiah  Thompson  and  Theodore  Stanton  being  first  duly  sworn,  de- 
pose and  say,  and  each  for  himself  deposes  and  says,  that  the  said  Josiah 
Thompson  was  the  President  and  the  said  Theodore  Stanton  was  the 
Secretary  of  the  Modern  Realty  Corporation  and  each  acted  in  his  official 
capacity  at  the  meeting  of  the  stockholders  thereof,  held  on  the  2nd  day 
ot  February,  1906,  to  determine  whether  the  number  of  directors  should 
be  increased  from  five  to  seven;  and  that  the  foregoing  is  a  correct 
transcript  of  the  proceedings  of  such  meeting  as  shown  by  the  Minutes 
thereof. 

JOSIAH   THOMPSON, 

President. 
THEODORE  STANTON, 

Secretary. 

Sworn  to  before  me  this  2nd  day     \ 
of  February,  1906.  I 

GEORGE  WILLIAMS, 

/  NOTARIAL  \  Notary  Public, 

1.      SEAL.      I  New  York  County. 

(See  S.  C.  L.,  §  21.) 


This  verified  transcript  must  be  filed  and  recorded  with 
the  Secretary  of  State — recording  fees,  15  cents  per  folio — 
and  with  the  clerk  of  the  county  in  which  the  corporation  has 
its  principal  office.  Clerk's  fees,  6  cents  for  filing  and  10  cents 
per  folio  for  recording. 

The  increase  of  directors  might  have  been  effected  by 
unanimous  written  consent  of  the  stockholders  without  a 
meeting.  This  consent  is  filed  in  the  same  offices  and  with  the 
s?.me  fees  as  is  the  verified  transcript  (Form  56c)  when  the 
increase  is  authorized  by  vote  of  the  stockholders.  (See 
§  726.)  Its  general  form  is  as  follows: 


268  NEW    YORK    CORPORATIONS. 


Form  56.     Increase  of  Number  of  Directors,     (d)  Unani- 
mous Consent. 


MODERN  REALTY  CORPORATION. 


INCREASE  OF  NUMBER  OF  DIRECTORS. 
UNANIMOUS  CONSENT  OF  STOCKHOLDERS. 


We,  the  undersigned,  being  all  the  stockholders  of  the  Modern  Realty 
Corporation,  a  corporation  duly  incorporated  under  the  laws  of  the  State 
of  New  York,  hereby  agree  and  consent  that  the  number  of  directors  of 
said  corporation  shall  be  increased  from  five  (5)  to  seven  (7). 

In  Witness  Whereof,  we  have  executed  this  instrument  in  dupli- 
cate this  2nd  day  of  January,  1906. 

JOSIAH  THOMPSON,  owning  70  Shares. 

STEPHEN  RANSOM,  20 

JOHN  J.  McHuGH,  30 

M.  M.  VAIL,  10 

WILLIAM  DALY,  10 

ALICE  McCoMB,  25 

HENRY  MICHAEL,  10 

HORACE  G.  WELLS,  15 

JAMES  MULLIN,  10 

(Acknowledgment   of    stockholders    and    affidavit    of    custodian    of    stock 
book  as  in  Form  S3a.) 

(See  S.  C.  L.,  §  21.) 
Form  57.     Voluntary  Dissolution,     (a)  Certificate. 

THE  GLOVERSVILLE  LINEN  COMPANY 

OF 

Gloversville,  New  York. 


CERTIFICATE  OF  VOLUNTARY  DISSOLUTION. 


We,  Robert  W.  Jackson  and  James  E.  Truesdale,  respectively  Presi- 
dent and  Treasurer  of  the  Gloversville  Linen  Company,  a  corporation  or- 


SUNDRY  INSTRUMENTS.  269 

ganized  under  the  laws  of  the  State  of  New  York,  do  make  and  attest 
this  certificate  of  voluntary  dissolution,  filing  herewith  proof  of  due  pub- 
lication and  service  of  notice  of  stockholders'  meeting,  the  consent  of  the 
stockholders  thereat  to  dissolution  of  the  company  and  the  names  and 
residences  of  the  directors  and  officers  of  the  Company,  all  as  required 
by  the  provisions  of  Section  57  of  The  Stock  Corporation  Law  to  effect 
voluntary  dissolution;  and  do  herein  set  forth: — 

'(i)  That  the  Board  of  Directors  of  said  corporation  at  a  meeting 
called  for  that  purpose  upon  three  days'  notice  to  each  director  and  held 
pursuant  thereto  on  the  4th  day  of  January,  1906,  at  3  o'clock  p.  m.,  did 
adopt  the  following  resolution  by  a  vote  of  the  majority  of  the  whole 
board : 

Whereas,  in  the  opinion  of  the  board  it  is  advisable  to  dissolve 
the  corporation  forthwith : 

Therefore,  Be  It  Resolved  That  the  Board  of  Directors  recom- 
mends the  voluntary  dissolution  of  the  Company  under  the  provisions 
of  Section  57  of  the  Stock  Corporation  Law,  and  hereby  calls  a  meet- 
ing of  its  stockholders  to  be  held  in  the  office  of  the  Company  at 
Gloversville,  New  York,  on  the  loth  day  of  February,  1906,  at  10 
a.  m.,  for  the  purpose  of  voting  upon  a  proposition  for  immediate 
dissolution  in  accordance  with  the  requirements  of  said  law. 

That  the  Secretary  be  hereby  instructed  to  cause  a  notice  of  such 
meeting  to  be  published  and  served  according  to  law,  and  that  the 
President  or  Vice-President,  and  the  Secretary  or  Treasurer  be  here- 
by authorized  and  instructed  to  make  and  execute  all  such  certifi- 
cates, proofs  and  other  instruments  in  accordance  with  the  facts,  as 
may  be  necessary  to  show  compliance  with  the  statutory  requirements 
for  voluntary  dissolution,  and  to  file  the  same  with  the  Secretary  of 
State,  and  to  do  all  such  other  things  as  may  be  necessary  in  the 
matter. 

(2)  That  notice  of  the  stockholders'  meeting  provided   for  by  the 
foregoing   resolution   was    duly  published   in   the   Gloversville   Record,    a 
newspaper  published  and  circulating  in  the  county  where  the  corporation 
has  its  principal  office,  once  a  week  for  three  successive  weeks  next  pre- 
ceding the  time  appointed  for  holding  such  meeting,  as  set  forth  in  the 
annexed  proof  of  publication. 

(3)  That  on  January  2Oth,  1906,  being  the  day  of  the  first  publication 
of  such  notice,  a  copy  thereof  was  duly  mailed  to  each   stockholder  of 
record  at  his  last  known  post-office  address,  as  evidenced  by  the  annexed 
proof  of  service. 

(4)  That  a  meeting  of  the  stockholders  of  the  Company  was  duly 
held  pursuant  to  said  notice  on  the   loth  day  of  February,    1906,  at   10 
o'clock  a.  m.,  in  the  principal  office  of  the  Company  at  Gloversville,  New 
York,  the  place  where  the  last  preceding  annual  meeting  of  the  corpora- 
tion was  held,  and  that  at  such  meeting  holders  of  more  than  two-thirds 
in  amount  of  the  stock  of  the  corporation  then  outstanding  appeared  in 
person  and  adopted  the  following  resolution  by  unanimous  vote. 

Resolved,  That  we  as  stockholders  of  the  Gloversville  Linen  Com- 
pany approve  the  recommendation  of  the  Board  of  Directors  for  the 
voluntary  dissolution  of  the  Company,  and  we  consent  that  such  dis- 
solution shall  be  effected  forthwith. 


27O  NEW    YORK    CORPORATIONS. 

(5)  That  holders  of  more  than  two-thirds  of  the  capital  stock  of  the 
Company  thereupon  in  person  duly  executed  the  annexed  consent  to  the 
immediate  dissolution  of  the  corporation. 

In   Witness  Whereof,  we  have  hereunto  set  our  signatures  this 
I2th  day  of  February,  1906. 

ROBERT  W.   JACKSON,  President. 
JAMES  E.   TRUESDALE,   Treasurer. 

(Affidavit  of  president  and  treasurer  in  same  form  as  affidavit  given 
in  Form  43.) 

(See  S.  C.  L.,  §  57-) 

Form  57.     Voluntary  Dissolution,     (b)  Consent  of  Stock- 
holders. 


GLOVERSVILLE  LINEN  COMPANY. 


CONSENT  OF  STOCKHOLDERS. 


We,  the  undersigned,  being  holders  of  at  least  two  thirds  in  amount 
of  the  outstanding  stock  of  the  Gloversville  Linen  Company,  hereby  signify 
our  consent  to  the  immediate  dissolution  of  said  corporation  in  accordance 
with  the  provisions  of  Section  57  of  the  Stock  Corporation  Law. 

In  Witness  Whereof,  we  have  hereunto  set  our  signatures  and  the 
number  of  shares  of  stock  held  by  each  of  us  in  said  corpora- 
tion, this  loth  day  of  February,  1906. 

THEODORE  T.  LANE,  19  Shares. 

HENRY  GORHAM,  57 

ROBERT  W.  JACKSON,  10        " 

HENRY   G.   IDE,  2 

Attested  by:  JAMES    E.    BROWER,  10        " 

ROBERT  W.  JACKSON,  President. 
JAMES  E.  TRUESDALE,  Treasurer. 

STATE  OF  NEW  YORK,    ) 
County  of  Fulton.       /   ' 

Robert  W.  Jackson  and  James  E.  Truesdale,  being  duly  sworn,  depose 
and  say,  each  for  himself,  that  the  said  Robert  W.  Jackson  is  President 
and  the  said  James  E.  Truesdale  is  Treasurer  of  the  Gloversville  Linen 
Company,  the  corporation  referred  to  in  the  foregoing  certificate;  that 
the  foregoing  written  consent  of  stockholders  to  the  dissolution  of  said 
corporation  was  executed  in  person  by  such  stockholders  at  a  meeting 
of  stockholders  held  on  the  loth  day  of  February,  1906,  and  that  the 
number  of  shares  set  opposite  each  signature  is  the  number  of  shares 
standing  on  the  books  of  the  corporation  in  the  name  of  the  consenting 
stockholder  and  that  the  whole  number  of  outstanding  shares  of  said 


SUNDRY  INSTRUMENTS. 


corporation  is  One  Hundred    (100),  of  which  the  number  consenting  is 
more  than  two-thirds. 


Sworn  to  before  me  this  I3th  day     \ 


ROBERT  W.  JACKSON. 
JAMES   E.   TRUESDALE. 


of  February,  1906. 

WILLIAM  E.  JACKSON, 

f  NOTARIAL  )  Notary  Public  for 

I      SEAL.      J  Fulton  County. 


Form  57.     Voluntary  Dissolution,     (c)  Statement  of  Sec- 
retary. 

GLOVERSVILLE  LINEN  COMPANY. 


STATEMENT  OF  SECRETARY. 


I,  the  undersigned,  Secretary  of  the  Gloversville  Linen  Company,  do 
hereby  certify  that  the  names  and  residences  of  the  existing  Board  of 
Directors  of  said  Corporation  and  the  names  and  residences  of  its  offi- 
cers are  as  follows : 

NAMES  OF  DIRECTORS.  RESIDENCES. 

James  E.  Brower  Gloversville,  New  York. 

Henry  G.  Ide   

Robert  W.  Jackson  1 12  W.  94th  St.,  New  York  City. 

NAMES  OF  OFFICERS.  RESIDENCES. 

Robert  W.  Jackson,  President 112  W.  94th  St.,  New  York  City. 

Henry  G.  Ide,  Vice-President Gloversville,  New  York. 

Howard  S.  Williams,  Secretary   .... 

James  E.  Truesdale,  Treasurer 246  West  End  Ave.,  New  York  City. 

HOWARD  S.  WILLIAMS, 

Secretary. 

STATE  OF  NEW  YORK,    "1 
County  of  Fulton.       J  **" 

Howard  S.  Williams,  being  duly  sworn,  says  that  he  is  the  Secretary 
of  the  Gloversville  Linen  Company  and  that  the  names  and  residences  of 
the  existing  directors  and  officers  of  said  company  as  above  set  forth  are 
to  his  knowledge  true. 

HOWARD  S.  WILLIAMS. 
Sworn  to  before  me  this  I3th  day  1 
of  February,  1906.  J 

PAUL  APGAR, 

/  NOTARIAL  \  Notary  Public  for 

\      SEAL.      J  Fulton  County. 


2/2  NEW    YORK    CORPORATIONS. 

Form  57.     Voluntary  Dissolution,     (d)  Affidavit  of  Sec- 
retary. 


GLOVERSVILLE  LINEN  COMPANY. 


AFFIDAVIT  OF  SECRETARY. 


STATE  OF  NEW  YORK,    \ 
County  of  Fulton.       J 

Howard  S.  Williams,  being  duly  sworn,  deposes  and  .says  that  he  is 
the  Secretary  of  the  Gloversville  Linen  Company,  the  corporation  men- 
tioned in  the  foregoing  certificate  of  dissolution ;  that  pursuant  to  a  reso- 
lution of  the  board  of  directors  of  said  corporation,  adopted  January  4th, 
1906,  he  caused  to  be  published  in  the  Gloversville  Record,  a  newspaper 
published  and  circulating  in  the  County  of  Fulton  in  which  the  principal 
office  of  the  corporation  is  located,  a  notice  of  a  special  meeting  of  stock- 
holders, of  which  the  following  is  a  true  copy. 

"To  the  Stockholders  of  the  Gloversville  Linen  Company.  Pur- 
suant to  a  resolution  of  the  Board  of  Directors  of  said  Company 
recommending  the  voluntary  dissolution  of  the  corporation  and  call- 
ing a  meeting  of  its  stockholders  to  consider  the  same,  a  special  meet- 
ing of  the  stockholders  will  be  held  in  the  principal  office  of  the  Com- 
pany in  Gloversville,  New  York,  on  the  loth  day  of  February,  1906, 
at  10  o'clock  a.  m.,  for  the  purpose  of  voting  upon  a  proposition  that 
said  corporation  be  forthwith  dissolved." 

Deponent  further  says  that  on  the  2Oth  day  of  January,  1906,  being 
the  first  day  of  publication  of  said  notice,  he  caused  a  copy  of  the  same, 
securely  sealed  in  a  postpaid  packet,  to  be  mailed  to  each  stockholder  of 
record  at  his  last  known  post-office  address. 

HOWARD  S.  WILLIAMS. 
Sworn  to  before  me  this  I3th  day  \ 
of  February,  1906.  J 

JOSEPH  E.  CANS, 

•/  NOTARIAL  \  Notary  Public  for 

\      SEAL.      J  Fulton  County. 

(S.  C  L.,  §  57-) 

The  foregoing  papers,  and  any  proxies,  are  filed  with  the 
Secretary  of  State  who  issues  duplicate  certificates  of  filing. 
One  of  these  must  be  filed  with  the  clerk  of  the  county  in 
which  the  corporation  has  its  principal  office  and  a  copy  must 
be  published  at  least  once  a  week  for  two  weeks  in  one  or 
more  newspapers  published  and  circulating  in  the  county  of 
the  principal  office.  (See  §  56.)  Fees  to  Secretary  of  State, 
15  cents  per  folio  for  recording  and  $i  each  for  certificates 
of  filing.  Fee  to  county  clerk,  6  cents  for  filing  certificate. 


SUNDRY  INSTRUMENTS.  273 

Form  58.     Voting  Trust  Agreement. 

VOTING  TRUST  AGREEMENT. 


We,  the  undersigned,  stockholders  of  the  Glen  Harbor  Improvement 
Company,  a  corporation  organized  under  the  laws  of  the  State  of  New 
York,  and  having  its  principal  office  in  the  City  of  Yonkers,  in  said  State 
of  New  York,  do  hereby  in  consideration  of  the  premises  and  of  our 
mutual  undertakings  as  herein  set  forth,  severally  agree  to  transfer  and 
deliver  the  shares  of  stock  held  by  each  of  us  in  said  corporation  to 
Emmett  M.  Brown,  William  Swift  and  Andrew  McBride,  all  of  the  said 
City  of  Yonkers,  as  Voting  Trustees  hereunder,  and  mutually  agree  with 
them  and  with  each  other  that  said  Trustees  shall  hold  and  vote  the  said 
stock  for  the  period  of  five  years  from  the  date  hereof,  for  the  purposes 
herein  set  forth  and  under  the  following  terms  and  conditions : 

1.  All  stockholders  of  the  said  Company  may  join  in  the  voting  trust 
hereby   created,   by   signing  this   present   agreement   and   transferring,    in 
whole  or  in  part,  the  shares  of  stock  held  by  them  in  said  Company  to 
the  said  Trustees,  under  the  conditions  and  for  the  purposes  of  this  present 
agreement. 

2.  Each   stockholder  in   said   Company  joining  this  voting  trust  as 
aforeprovided  shall  become  a  party  thereto  from  the  date  on  which  stock 
owned   by   such   stockholder   in   said   Company   shall   be   transferred   and 
delivered  to  said  Trustees  for  the  purposes  of  this  agreement. 

3.  The  said  Trustees  shall  surrender  to  the  proper  officer  of  the  said 
Glen  Harbor  Improvement  Company,  for  cancellation,  the  certificates  for 
all  shares  of  stock  transferred  to  said  Trustees,  and  shall,  in  place  thereof, 
have  certificates  of  said  Company  issued  to  themselves  as  Trustees,  and 
on  the  face  of  each  said  Trustees'  certificate  shall  be  stated  the  fact  that 
such  certificate  has  been  issued  pursuant  to  this  agreement. 

4.  The   said    Trustees    shall    collect    and    receive   all    dividends    and 
profits  accruing  to  said  stock  and  shall  pay  over  the  same  to  the  respective 
equitable  owners  thereof. 

5.  The  said  Trustees  shall  issue  to  each  stockholder  becoming  a  party 
hereto   one   or   more   transferable   Trustees'    receipts    for   the   number   of 
shares  of  stock  placed  by  each  of  said  stockholders  respectively  in  this 
voting  trust,  and  when  such   Trustees'   receipts  are  duly  transferred  to 
other  parties,  said  Trustees  shall  recognize  such  other  parties  as  the  lawful 
assigns  and  successors  of  the  original   parties  hereto,   entitled  to  all  of 
their  rights  in  the  premises. 

6.  The  stock  held  under  this  agreement  shall,  except  as  hereinafter 
specially  provided,  be  voted  at  any  meeting  of  the  stockholders  of  said 
Company  by  such  of  the  said  Trustees  as  may  be  present  thereat,  and  said 
vote  shall  be  cast  as  in  the  judgment  of  a  majority  of  the  said  Trustees 
present  at  any  such  meetings  may  be  for  the  best  interests  of  the  stock- 
holders subscribing  to  this  agreement. 

7.  In  all  elections  for  Directors  the  said  stock  shall  be  voted  for  the 
re-election   of  the  present  members   of  the   Board   of   Directors   of  said 
Company,  or,  in  the  event  of  the  death,  disability  or  refusal  to  serve  o£ 
any  such  members,  the  said  stock  shall  be  voted  for  such  other  person 
or  persons  as,  in  the  judgment  of  said  Trustees,  shall  be  most  suitable  for 
such  office. 

8.  This  agreement  shall  terminate  five  years  from  the  date  hereof, 


274  NEW    YORK    CORPORATIONS. 

and  upon  such  termination  the  said  Trustees  shall,  as  the  outstanding 
Trustees'  receipts  are  surrendered  to  them,  duly  endorsed,  give  over  to  the 
said  Company  the  certificates  of  stock  held  by  said  Trustees,  in  pursuance 
of  this  agreement,  properly  endorsed,  and  shall  direct  the  officers  of  said 
Company  to  deliver  to  the  respective  owners  of  the  said  surrendered 
Trustees'  receipts  certificates  for  such  number  of  shares  of  stock  as  may 
be  necessary  to  satisfy  the  requirement  of  the  said  surrendered  Trustees' 
receipts. 

9.  In  event  of  the  death,  disability,  resignation  or  refusal  to  act  of 
any  of  the  Trustees  herein  named,  the  remaining  Trustees,  or  Trustee, 
shall  have  power  to  suitably  fill  such  vacancy  or  vacancies,  and  the  person 
or  persons  so  appointed  shall  be  empowered  and  authorized  to  act  here- 
under  in  all  respects  as  if  originally  named  herein. 

10.  A  duplicate  of  this  agreement  shall  be  filed  in  the  principal  office 
of  the  said  Company  in  Yonkers  and  shall  there  be  kept  for  the  inspection 
of  any  stockholder  of  the  Company,  daily,  during  business  hours. 

In  Testimony  Whereof,  the  parties  to  this  agreement  have  here- 
unto affixed  their  hands  and  seals  in  the  said  City  of  Yonkers 
this  27th  day  of  September,  1905. 


VOTING   TRUSTEES. 

STOCKHOLDERS. 

TRANSFERRED. 

SHARES 

EM  MITT  M.  BROWN. 

(L.    S.) 

JAMES  HALSEY. 

(L.  S.) 

So 

WILLIAM  SWIFT. 

(L.    S.) 

ERNEST  JURGENS. 

(L.S.) 

125 

ANDREW  McBRiDE. 

(L.    S.) 

HAROLD  M.  GILSEY. 

(L.  s.) 

75 

WILLIS  M.  AMES. 

(L.S.) 

75 

(G.  C. 

L.,  §  20.) 

A  duplicate  of  this  agreement  must  be  kept  on  file  at  the 
principal  office  of  the  Company  and  be  open  to  the  inspection 
of  stockholders  daily  during  business  hours.  Any  stock- 
holder may  upon  request  become  a  party  to  such  agreement 
and  upon  transferring  his  stock  to  the  designated  trustees,  is 
entitled  to  participate  in  all  its  terms,  conditions  and  privi- 
leges. (See  §  98.) 

Form  59.     Underwriting  Agreement. 


THE  GLOBE  TELEGRAPH   COMPANY. 


A  corporation  to  be  organized  in  the  State  of  New  York,  or  in  such 
other  State  as  may  be  agreed  upon,  under  the  name  "Globe  Telegraph 
Company,"  or  such  other  name  as  may  be  adopted  therefor,  to  acquire  all 
United  States  patents  for  the  Alwyn  System  of  Rapid  Telegraphy,  to 
.build  and  operate  Telegraph  Lines,  etc. 


.SUNDRY  INSTRUMENTS.  2/5 

Capital    Stock $15,000,000 

Common    $8,000,000 

Preferred   7,000,000 

Six  Per  Cent.,  Non-Cumulative,  Voting. 

Stock  full-paid  and  non-assessable. 
Shares,  $100. 


In  Treasury  of  Company $12,000,000 

Preferred    $7,000,000 

Common  5,000,000 


Withdrawn  from  Public  Issue  under  Contract  with  Vendors : 
Common  Stock  $3,000,000 


To  raise  funds  for  the  purposes  of  the  Company,  $6,000,000  of  Pre- 
ferred Stock,  with  a  bonus  of  $3,000,000  of  Common  Stock,  is  now 
offered  for  underwriting  as  set  forth  below,  leaving  in  the  Treasury  of 
the  Company  $1,000,000  of  Preferred  Stock  and  $2,000,000  of  Common 
Stock. 


UNDERWRITING  AGREEMENT. 

We,  the  undersigned,  each  for  himself,  agree  with  the  Standard 
Trust  Company,  of  New  York  City,  for  itself  and  for  the  Globe  Tele- 
graph Company,  and  to  and  with  each  other,  to  subscribe  to,  receive  and 
pay  for  the  amount  of  6  Per  Cent.,  Non-cumulative,  Preferred  Stock  of 
the  Globe  Telegraph  Company,  set  opposite  our  respective  signatures 
hereto,  at  the  price  of  $95  for  each  $100  share ;  25  per  cent,  to  be  paid  on 
allotment  and  the  balance  upon  call  of  the  said  Standard  Trust  Company ; 
but  no  call  to  be  made  until  after  four  months  from  date  of  allotment  and 
no  single  call  to  be  for  more  than  25  per  cent. ;  thirty  days'  notice  to  be 
given  prior  to  any  call,  and  the  interval  between  calls  to  be  not  less  than 
three  months. 

We  further  agree  to  receive  and  pay  for  any  smaller  amount  than 
that  subscribed  for,  which  may  be  allotted  to  us  respectively. 

The  conditions  of  the  Underwriting  Agreement  are  as  follows : 

(1)  That  this  agreement  shall  not  be  binding  until  at  least  $2,000,000 
face  value   of  said   preferred   stock   shall   have   been   underwritten   here- 
under,  and  the  subscribers  hereunto  formally  notified  thereof  by  the  said 
Standard  Trust  Company. 

(2)  That   any   underwriter    shall    have   the   option    of    withdrawing 
from  the  public  offering  hereinafter  provided   for,  any  of  the  preferred 
stock  hereby  underwritten  by  him,  provided  that  he  notify  the  Standard 
Trust  Company,  in  writing,  not  less  than  ten  days  prior  to  the  date  fixed 
for  said  public  offering,  that  he  elects  to  so  withdraw  said  preferred  stock, 
and  the  stock  so  withdrawn  shall  be  paid  for  as  hereinbefore  set  forth. 

(3)  That  within  such  reasonable  time  as  shall  be  fixed  by  the  said 
Standard  Trust  Company,  the  preferred  stock  hereby  underwritten,   less 
any  amount  withdrawn  by  the  underwriters,  shall  be  offered  to  the  public 
through  such  banker  or  bankers  or  brokers  as  shall  be  designated  by  the 
said  Standard  Trust  Company,  at  such  price  in  excess  of  $95  per  share, 
and  with  such  bonus  of  common  stock  therewith,  as  may  be  agreed  upon 
between  the  said  Standard  Trust  Company  and  a  majority  in  interest  of 
the  unwithdrawn  stock  hereby  underwritten. 

{4)     That  if  the  amount  of  preferred  stock  subscribed  for  upon  such 


276  NEW    YORK    CORPORATIONS. 

public  offering,  and  paid  for,  shall  be  at  least  equal  to  the  amount  of 
preferred  stock  not  withdrawn  and  offered  to  the  public  as  above  pro- 
vided, then  all  liability  under  this  agreement  shall  cease  except  as  to 
stock  withdrawn  from  public  offering. 

(5)  That  in  case  the  preferred  stock  subscribed  for  upon  said  public 
offering,  and  paid  for  at  the  demanded  price,  shall  be  less  than  the  total 
amount  of  the  withdrawn  preferred  stock  so  offered,  then  upon  demand 
of  the  said  Standard  Trust  Company,  such  stock  remaining  unsubscribed 
01  unpaid  for  shall  be  taken  and  paid  for  by  the  subscribers  hereto  at  the 
rate  of  $95  per  share,  and  upon  the  terms  hereinbefore  set  forth,  in  pro- 
portion to,  but  only  up  to  the  amounts  of,  their  respective  subscriptions 
not  withdrawn  from  public  offering. 

(6)  That  from  the  proceeds  of  the  withdrawn  preferred  stock,  sold 
as  aforeprovided  at  public  sale,  and  paid  for,  such  amount  or  amounts 
shall  be  paid  so  soon  as  it  may  be  done,  to  the  underwriters  of  the  stock 
so  sold  and  paid  for,  as  shall  respectively  and  fully  reimburse  them  for 
any  installments  paid  by  them  upon  said  stock  under  the  terms  of  this 
agreement. 

(7)  That  each   underwriter   shall   receive  with   each   two   shares   of 
preferred   stock   withdrawn   or  paid   for   by   him   one   share   of  common 
stock. 

(8)  That  all  proceeds   in  excess  of  $95  per  share,  after  deduction 
of  all   issue  expenses,  realized   from  the  sale  of  preferred   stock   under- 
written hereunder  and  .sold  at  public  offering  as  aforeprovided,  and  such 
portion  of  the  common  stock  attaching  as  a  bonus  to  the  preferred  stock 
underwritten  hereunder,  not  given   as   a  bonus   to   subscribers   on  public 
issue,  or  delivered  with,  or  held  for,  preferred  stock  withdrawn,  shall  be- 
long to  the   underwriters  hereunder,  and   shall   be   delivered  to  them   in 
proportion   to   their   respective   subscriptions   not  withdrawn   from   public 
offering. 

(9)  That  stock  withdrawn  or  paid  for  as  hereinbefore  provided  shall 
be   held  by   the    Standard   Trust    Company   until    full   payment  be   made 
therefor,   and   until    delivery  is   made   of  the   stock    subscribed   at   public 
offering,  when  such  withdrawn  or  paid-for  stock  shall  be  delivered  to  the 
owners  thereof. 

(10)  That  this  agreement  may  be  executed  in  separate  instruments 
with  the  same  force  and  effect  and  individual  obligation  as  if  all  the  sig- 
natures thereto  were  affixed  to  a  single  instrument. 

New  York,  February  15,  1906. 


Form  60.     Resolution  Declaring  Dividend. 


Resolved,  That  the  sum  of  Twelve  Thousand  Dollars  be  and  hereby 
is  appropriated  and  set  aside  from  the  surplus  profits  of  the  Company  for 
the  payment  of  the  regular  one  and  one-half  per  cent,  quarterly  dividend 
upon  its  outstanding  stock,  said  dividend  to  be  due  and  payable  February 
26th,  1906,  to  stockholders  of  record  at  3  o'clock  p.  m.,  Thursday,  January 
25th,  1906. 

Resolved  Further,  That  the  Treasurer  of  this  Company  be  authorized 
and  instructed  to  notify  the  stockholders  of  such  dividend  and  to  pay 
the  same  when  due. 

(See  §  88,  Dividends.) 


SUNDRY  INSTRUMENTS.  2/7 

Form  61.     Notice  of  Dividend. 

LAKE  SUPERIOR  COPPER  COMPANY, 
42  BROADWAY,  NEW  YORK,  JANUARY  i8xH,  1906. 


At  a  meeting  of  the  Directors  of  the  Lake  Superior  Copper  Company, 
a  dividend  of  one  and  one-half  per  cent,  (i  */2%)  was  declared,  payable 
at  this  office  February  26th,  1906,  to  stockholders  of  record  at  3  p.  m., 
January  25th,  1906.  Transfer  books  close  at  3  p.  m.,  January  25th,  1906, 
and  reopen  at  10  a.  m.,  February  I3th,  1906. 

A.  H.  WATSON, 
Secretary  and  Treasurer. 

(See  §  88,  Dividends.) 

In  the  smaller  corporations  dividend  notices  are  not 
usually  published,  notice  by  mail  being  deemed  sufficient.  In 
the  larger  corporations  they  are  generally  both  mailed  and 
published.  The  foregoing  is  a  common  form  of  publication 
notice.  As  a  mailing  notice  it  would  have  the  address  pre- 
fixed and  an  introductory  phrase  as,  "You  are  hereby  notified 
that  at  a  meeting,  etc." 

Form  62.     Treasurer's  Bond. 


TREASURER'S  BOND. 


Know  All  Men  By  These  Presents,  That  we,  John  F.  Marckel,  of 
New  York  City,  as  principal,  and  Henry  McLean  and  John  B.  Hastings, 
both  also  of  New  York  City,  as  sureties,  are  held  and  firmly  bound  unto 
the  Dubois  Smelting  Company,  a  corporation  duly  organized  under  the 
laws  of  the  State  of  New  York,  its  successors  and  assigns, .in  the  sum  of 
Fifteen  Thousand  Dollars  ($15,000),  to  the  payment  of  which  to  the  said 
corporation,  its  successors  or  assigns,  we  do  by  these  presents,  jointly  and 
severally,  firmly  bind  ourselves,  our  heirs,  executors  and  administrators. 

Signed  and  sealed  this  twenty-sixth  day  of  February,   1906. 

The  condition  of  the  above  obligation  is  that : 

Whereas,  The  said  John  F.  Marckel  has  been  elected  Treasurer  of 
the  said  Dubois  Smelting  Company  for  the  term  of  one  year  from  the  28th 
day  of  February,  1906 ;  and,  whereas,  the  said  John  F.  Marckel  may  here- 
after be  re-elected,  or  may  continue  to  act  as  such  officer  for  a  longer 
period  than  one  year ; 


278  NEW    YORK    CORPORATIONS. 

Now,  Therefore,  If  the  said  John  F.  Marckel  shall  hereafter  in  all 
respects  fully  and  faithfully  perform  and  discharge  the  duties  of  said 
office  so  long  as  he  shall  occupy  the  same  or  continue  therein,  and  shall, 
when  properly  so  required,  fully  and  faithfully  account  by  the  said  corpora- 
tion, its  successors  or  assigns,  for  all  moneys,  goods  and  properties  what- 
soever, for  or  with  which  the  said  John  F.  Marckel  may  be  in  anywise 
accountable  or  chargeable  to  the  said  corporation,  its  successors  or  assigns, 
and  if,  in  event  of  his  death,  resignation  or  removal  from  office,  all  books, 
papers,  vouchers,  money  and  other  property  of  whatever  kind  in  his  cus- 
tody belonging  to  the  said  corporation,  shall  be  forthwith  restored  to  the 
said  corporation,  then  this  obligation  shall  be  void ;  otherwise  to  remain 
in  full  force  and  virtue. 

JOHN  F.  MARCKEL.   (L.  s.) 
HENRY  MCLEAN.       (L.  s.) 

Signed,  sealed  and  delivered  JOHN  B.  HASTINGS.  (L.  s.) 

in  the  presence  of 

HARRIS  SCOVILLE. 
WALLACE  H.  JOHNSON. 

(See  §  129,  Security  required  from  officers.) 
The  Corporate  Calendar. 

The  corporate  calendar  consists  of  memoranda  covering 
all  those  important  formalities  connected  with  the  corporation 
that  must  be  attended  to  at  stated  times.  These  should  be  so 
arranged  in  chronological  order  that  the  secretary  may,  by 
a  glance  at  his  calendar,  see  what  duties  require  his  attention. 

The  amount  of  detail  entered  on  the  calendar  will  de- 
pend upon  the  ideas  of  the  individual  secretary,  ranging  from 
a  skeleton  outline  of  reports  and  notices  required  by  the  stat- 
utes and  by-laws,  to  a  compendious  digest  of  corporate  pro- 
cedure. It  is  wise  to  enter  reasonably  full  details,  to  save  sub- 
sequent research  and  trouble. 

The  New  York  calendar  for  1906,  which  follows,  is  for 
a  corporation  having  its  principal  place  of  business  in  the 
City  of  New  York;  holding  its  annual  meeting  of  stock- 
holders on  the  third  Wednesday  of  January,  at  3  p.  m.,  with 
quarterly  meetings  of  directors  on  the  third  Thursday  of  Janu- 
ary, April,  July  and  October,  at  4  p.  m.  Its  by-laws  require 
two  weeks'  notice  of  annual  meetings  and  five  days'  notice  of 
directors'  meetings.  The  stock  book  is  closed  twenty  days 
before  the  annual  meeting. 


SUNDRY  INSTRUMENTS.  279 

In  the  calendar  as  given,  the  date  for  filing  reports,  pay- 
ment of  taxes,  etc.,  is  entered  fifteen  days  in  advance  of  the 
last  day  allowed  by  law ;  that  is,  a  report  that  may  be  deferred 
if  desired  until  the  3Oth  day  of  January,  is  entered  on  the 
calendar  under  date  of  January  I5th.  This  is  a  precaution 
that  may  be  varied  to  suit  the  individual.  A  safe  margin 
should,  however,  always  be  left,  and  that  of  fifteen  days  allow- 
ed in  the  present  calendar  is  not  excessive. 

Form  63.     Corporate  Calendar. 


CORPORATE  CALENDAR 

OF  THE 
EAST  RIVER  PACKING  COMPANY, 

of  New  York  City. 
1906. 
January. 

2nd.  Franchise  Tax  Payable.  Must  be  paid  before  January  15th. 
Based  upon  November  report.  Amount  of  tax  fixed  and 
statement  thereof  rendered  to  Company  by  State  Comp- 
troller. Checks  should  be  made  payable  to  State  Treas- 
urer. (See  §  138,  Franchise  Tax.) 

3rd.  Notify  Stockholders  of  Annual  Meeting  to  be  held  January 
i7th.  (See  §  101  (b),  Notice  of  Annual  Meeting.) 

8th.  City  Assessments  made  for  1906.  Books  open  for  correction 
at  280  Broadway,  Manhattan,  till  March  3ist.  If  notice 
of  assessment  is  not  received  in  the  early  part  of  January 
it  should  be  sent  for.  The  Tax  Commissioners  usually 
send  notice  but  are  under  no  obligation  to  do  so.  (See 
Form  4Qb,  "Local  Tax  Report,  New  York  City,"  for  form 
of  application  for  revision  and  correction  of  assessments.) 

I3th.  Notify  Directors  of  Meeting  to  be  held  January  i8th.  If 
directors  are  elected  at  annual  meeting  (January  I7th), 
this  notice  will  be  rendered  non-effective  and  must  then 
be  replaced  by  waiver  of  notice  signed,  after  the  election, 
by  all  the  newly  elected  directors. 

I5th.  Last  Day  for  Payment  of  State  franchise  tax  for  1905.  Un- 
paid city  tax  bills  sent  to  Marshal  for  collection. 

i6th.  Annual  Report.  To  State  officials.  Must  be  filed  on  or 
before  January  3ist.  Execute  and  file  with  Secretary  of 
State.  No  filing  fees.  Blanks  not  supplied  by  officials. 
No  penalty  is  incurred  if  this  report  is  omitted  unless 
such  filing  is  requested  by 'some  stockholder  or  creditor 
of  the  Company.  If  so  requested,  report  must  be  filed 
within  thirty  days  after  such  request  is  made.  (See  §  174, 
Annual  Report.) 

I7th.      Annual  Meeting  of  Stockholders  at  3  p.  m. 


280 


NEW    YORK    CORPORATIONS. 


l8th. 

3 1  st. 
February. 

March. 

i6th. 


3 1  st. 


April. 


May. 
June. 

July. 


I4th. 
ipth. 


I4th. 
ipth. 


August. 

September. 

October. 

ist. 

1 3th. 
i8th. 

November. 
ist. 

15th. 

December. 
I5th. 

2;th. 


Directors'  Meeting  at  4  p.  m.  If  directors  were  elected  at 
annual  meeting,  have  waiver  of  notice  signed  by  each 
director.  (For  general  form,  see  Form  n,  "Call  and 
Waiver.") 

Last  Day  for  Filing  annual  report. 


Statement  and  Application  for  revision  of  unsatisfactory 
assessments,  if  not  already  filed,  should  be  sent  in  to  the 
Commissioners  of  Taxes  and  Assessments  without  delay. 
Will  not  be  received  after  March  3ist.  Blanks  furnished 
by  Commissioners.  No  fees.  (See  Form  4Qb.) 
Last  Day  for  Filing  application  for  revision  of  city  assess- 
ments. 


Notify  Directors  of  Meeting  to  be  held  April  igth. 
Directors'  Meeting  at  4  p.  m. 


Notify  Directors  of  Meeting  to  be  held  July  igth. 
Directors'  Meeting  at  4  p.  m. 


City  Taxes  payable.     Rebate  of  6%  per  annum  from  date  of 

payment  to  December  ist  if  paid  before  November  ist. 
Notify  Directors  of  Meeting  to  be  held  October  i8th. 
Directors'  Meeting  at  4  p.  m. 


Comptroller's  Report  must  be  sent  in,  on  or  before  November 
I5th.  Blanks  furnished  by  Comptroller.  No  fees.  '(See 
§  175,  Report  to  State  Comptroller.) 

City  Taxes.     If  not  paid  before  December  ist,  i%  is  added 
to  amount. 


City  Taxes  for  1905,  if  unpaid  January  ist,  1907,  draw 
interest  at  the  rate  of  7%  per  annum,  computed  from  the 
first  Monday  in  October,  1906. 

Close  Transfer  Books  for  annual  meeting  on  January  i6th, 
1907.  (See  §  105,  Closing  Stock  Book.) 


CHAPTER  XXV. 
BOND  ISSUES. 


Under  the  New  York  statutes,  every  mortgage  by  a  cor- 
poration must  be  authorized  by  the  consent  of  the  holders  of 
not  less  than  two-thirds  of  the  capital  stock  of  the  corporation. 
This  authorization  may  be  given  either  by  action  at  a  special 
meeting  called  for  that  purpose  upon  the  same  notice  as  that 
required  for  an  annual  meeting  (See  §  loib),  or  by  a  writ- 
ten consent  signed  by  the  holders  of  the  requisite  amount  of 
stock.  (See  Form  65.) 

The  form  of  resolution,  if  action  were  taken  at  a  meeting, 
would  be  as  follows: 

Form  64.     Stockholders'    Resolution    Authorizing    Mort- 
gage. 

Resolved,  That  the  Board  of  Directors  and  proper  officers  of  the 
Remsen  Realty  Company  be  hereby  authorized  and  empowered  to  make 
and  issue  its  first  mortgage,  six  per  cent.,  thirty  year,  gold  bonds  to  the 
amount  of  three  hundred  thousand  dollars  ($300,000)  and  to  secure  the 
due  payment  of  the  principal  and  interest  thereof,  by  executing  and  de- 
livering to  a  suitable  trustee  a  first  mortgage  or  deed  of  trust  upon  the 
entire  property  and  franchises  of  the  said  Remsen  Realty  Company. 


The  minutes  of  the  special  or  annual  meeting  at  which 
this  resolution  is  adopted  should  show  that  the  required  legal 
notice  of  the  meeting  has  been  given,  and  that  a  stock  vote 
of  not  less  than  two-thirds  of  the  outstanding  stock  was  cast 
thereat  in  favor  of  such  resolution. 

Unless  the  stockholders  of  a  company  are  very  numerous, 
it  is  simpler  to  secure  the  necessary  authorization  for  a  bond 
issue  by  a  written  consent,  as  shown  in  the  following  form : 

281 


282  NEW    YORK    CORPORATIONS. 

Form  65.     Stockholders'  Written  Consent  to  Mortgage. 

CONSENT  TO  MORTGAGE. 


We,  the  undersigned,  stockholders  of  the  Remsen  Realty  Company,  a 
corporation  duly  organized  and  existing  under  the  laws  of  the  State  of 
New  York,  with  a  capital  stock  of  $500,000  divided  into  5,000  shares  of  the 
par  value  of  $100  each,  owning  and  holding  more  than  two-thirds  of  the 
capital  stock  thereof,  do  hereby  consent  and  agree  that  the  Board  of 
Directors  and  proper  officers  of  the  said  company  may  make  and  issue  its 
first  mortgage,  six  per  cent.,  thirty  year,  gold  bonds  to  the  amount  of  three 
hundred  thousand  dollars  ($300,000),  and  may  secure  the  due  payment  of 
the  principal  and  interest  thereof  by  executing  and  delivering  to  a  suitable 
trustee  a  first  mortgage  or  deed  of  trust  upon  the  entire  property  and 
franchises  of  the  said  Remsen  Realty  Company. 

In  Witness  Whereof,  we  have  hereunto  set  our  signatures  and 
opposite  thereto  the  number  of  shares  of  stock  held  by  each 
of  us  in  the  said  corporation,  this  first  day  of  February,  1906. 

FRANKLIN  MOFFAT,  3,000  shares. 
MANLY  T.  HEWLIT,  1,000  shares. 
JOHN  P.  GOLDMAN,  73  shares. 

STATE  OF  NEW  YORK,       } 
County    of    New    York,   f  J< 

On  this  2d  day  of  February,  1906,  before  me  personally  came  Franklin 
Moffat,  Manly  T.  Hewlit  and  John  P.  Goldman,  to  me  known  and  known 
to  me  to  be  the  persons  described  in  and  who  executed  the  foregoing 
consent  to  mortgage,  and  severally  duly  acknowledged  to  me  that  they 
had  made,  signed  and  executed  the  same  for  the  uses  and  purposes  therein 
set  forth. 

/  NOTARIAL  \  JOHN  WISE, 

I      SEAL.      )  Notary  Public  for  New  York  County. 


Whether  the  consent  is  given  at  a  meeting  or  by  written 
consent,  a  corporate  certificate  must  be  prepared  as  in  the 
form  following  and  filed  in  the  office  of  the  clerk  or  register 
of  the  county  wherein  the  corporation  has  its  principal  place 
of  business.  This  certificate  is  drawn  on  the  assumption  that 
the  required  authorization  was  given  by  resolution.  If  it  were 
given  in  writing  the  reference  to  the  consent  in  the  certificate 
would  be  changed  to  correspond. 


BOND    ISSUES.  283 

Form  66.     Certificate  of  Consent  to  Mortgage. 


This  is  to  certify  that  the  holders  of  more  than  two-thirds  of  the 
capital  stock  of  the  Remsen  Realty  Company,  a  corporation  duly  organized 
and  existing  under  the  laws  of  the  State  of  New  York,  have,  pursuant  to 
the  provisions  of  Sec.  2,  of  the  Stock  Corporation  Law  of  New  York, 
as  amended  June  3d,  1905,  given  their  consent  by  resolution  duly  adopted 
at  a  special  meeting  of  the  stockholders  called  for  that  purpose  in  accord- 
ance with  the  statute  requirements,  that  the  Board  of  Directors  and  proper 
officers  of  said  corporation  may  make  and  issue  its  first  mortgage,  thirty 
year,  six  per  cent,  gold  bonds,  to  the  amount  of  three  hundred  thousand 
dollars  ($300,000),  and  may  secure  the  due  payment  of  the  principal  and 
interest  thereof  by  executing  and  delivering  to  a  suitable  trustee  a  first 
mortgage  or  deed  of  trust  upon  the  entire  property  and  franchises  of  the 
said  Remsen  Realty  Company. 

In  Witness  Whereof,  the  said  Remsen  Realty  Company  has  caused 
its  corporate  signature  and  seal  to  be  hereunto  affixed  by  its 
President  and  Secretary  duly  authorized  thereto,  all  being 
done  in  the  City,  County  and  State  of  New  York,  this  second 
day  of  February,  in  the  year  one  thousand  nine  hundred  and 
six. 

REMSEN  REALTY  COMPANY, 

j  CORPORATE  )  By  FRANKLIN  MOFFAT, 

I      SEAL.       )  President. 

CHARLES  E.  WARREN, 

Secretary. 


STATE  OF  NEW  YORK,      ) 


County    of    New    York. 

On  this  loth  day  of  February,  1906,  before  me  personally  came  Frank- 
lin Moffat  and  Charles  E.  Warren,  to  me  known,  who,  being  by  me  duly 
severally  sworn,  did  depose  and  say,  each  for  himself,  that  the  said 
Franklin  Moffat  resided  in  the  City  of  New  York  and  was  the  President 
of  the  Remsen  Realty  Company,  and  the  said  Charles  E.  Warren  resided 
in  the  City  of  Newark,  New  Jersey,  and  was  the  Secretary  of  the  Remsen 
Realty  Company,  the  corporation  described  in  and  which  executed  the 
foregoing  instrument ;  that  they  each  knew  the  seal  of  the  said  corporation ; 
that  the  seal  affixed  to  said  instrument  was  such  corporate  seal ;  that  it 
was  so  affixed  by  order  of  the  Board  of  Directors  of  said  corporation  and 
that  they  signed  their  names  thereto  by  like  order. 

FRANKLIN   MOFFAT. 

Sworn  to  before  me  this  loth   )  CHARLES  E.  WARREN. 

day  of  February,  1906.  \ 

JOHN  WISE, 

(  NOTARIAL  )  Notary  Public  for  New  York  County. 

\      SEAL.      f 


Following  the  execution  and  filing  of  this  certificate  the 
directors  would  meet  and  pass  the  following  resolution,  re- 
citing what  has  been  done,  authorizing  the  officers  to  proceed 
in  the  matter,  and  providing  for  the  details  of  the  transaction. 


284  NEW    YORK    CORPORATIONS. 

Form  67.     Directors'  Resolution  Authorizing  Bond  Issue. 


Whereas,  As  provided  by  Sec.  2,  of  the  Stock  Corporation  Law  of 
the  State  of  New  York,  as  amended  June  3d,  1905,  the  holders  of  more 
than  two-thirds  of  the  capital  stock  of  the  Remsen  Realty  Company  have, 
in  accordance  with  the  requirements  of  the  statutes,  given  their  consent, 
by  resolution  duly  adopted  at  a  special  meeting  of  the  stockholders  called 
for  that  purpose,  that  the  Board  of  Directors  and  proper  officers  of  said 
company  may  make  and  issue  its  first  mortgage,  thirty  year,  six  per  cent., 
gold  bonds  to  the  amount  of  Three  Hundred  Thousand  Dollars  ($300,000), 
and  secure  the  due  payment  of  the  principal  and  interest  thereof  by 
executing  and  delivering  to  a  suitable  trustee  a  first  mortgage  or  deed 
of  trust  upon  the  entire  property  and  franchises  of  the  said  Remsen  Realty 
Company;  and 

Whereas,  The  President  and  Secretary  of  said  company  have  made 
and  filed  in  the  office  of  the  County  Clerk  of  New  York  County  their 
certificate  that  such  consent  was  legally  given ; 

Now  Therefore  Be  It  Resolved,  That  in  pursuance  of  the  said  con- 
sent the  Board  of  Directors  of  the  Remsen  Realty  Company  hereby  author- 
izes, empowers  and  instructs  the  President  and  other  officers  of  the  said 
company  to  make  and  issue  six  hundred  (600)  of  its  first  mortgage,  thirty 
year,  gold  bonds  of  the  denomination  of  Five  Hundred  Dollars  ($500) 
each,  all  the  said  bonds  to  be  dated  the  second  day  of  May,  1904,  and 
to  bear  interest  at  the  rate  of  six  per  cent,  per  annum,  payable  semi- 
annually  on  the  first  days  of  May  and  November  in  each  year,*  and  to 
secure  the  due  payment  of  the  principal  and  interest  of  said  bonds  said 
officers  are  hereby  further  authorized  and  instructed  to  execute  and  deliver 
to  the  Metropolis  Trust  Company  of  the  City  of  New  York,  as  Trustee, 
a  first  mortgage  or  deed  of  trust  upon  the  entire  plant,  property  and  fran- 
chises of  the  Remsen  Realty  Company, 


The  following  deed  of  trust  is  drawn  up  in  pursuance  of 
the  foregoing  stockholders'  consent  and  directors'  authorizing 
resolution. 

Form  68.     Deed  of  Trust,  Including  Forms  of  Bond  and 
Coupon. 

DEED  OF  TRUST. 


This  Indenture,  made  and  entered  into  this  I2th  day  of  March,  one 
thousand  nine  hundred  and  six,  by  and  between  the  Remsen  Realty  Com- 
pany, a  corporation  duly  organized  and  existing  under  the  laws  of  the 
State  of  New  York,  having  its  office  at  No.  170  Broadway,  New  York 

*  Here  may  be  inserted,  if  desired,  "and  said  bonds,  certificates  and 
interest  coupons  shall  be  in  substantially  the  forms  following."  (Full 
forms  as  in  Deed  of  Trust.) 


BOND    ISSUES.  285 

City,  hereinafter  called  the  Realty  Company,  party  of  the  first  part,  and 
the  Metropolis  Trust  Company  of  the  City  of  New  York,  a  corporation 
duly  organized  and  existing  under  the  laws  of  the  State  of  New  York, 
having  its  principal  office  at  Nos.  37  and  39  Wall  Street,  New  York  City, 
as  Trustee,  hereinafter  called  the  Trustee,  party  of  the  second  part, 
Witnesseth : 

Whereas,  The  Board  of  Directors  of  the  said  Realty  Company  has,  by 
the  authority  and  with  the  consent  of  the  stockholders  thereof,  legally 
given,  duly  resolved  to  borrow  three  hundred  thousand  dollars  for  the 
lawful  business  purposes  of  the  said  Company,  and  for  that  purpose  to 
execute  and  issue  its  first  mortgage,  six  per  cent.,  thirty  year,  gold  bonds 
of  the  par  value  of  five  hundred  dollars  each,  dated  the  second  day  of 
May,  1906,  and  payable  on  the  first  day  of  May,  1936,  in  gold  coin  of  the 
United  States  of,  or  equivalent  to,  the  present  standard  of  weight  and 
fineness,  said  bonds  to  bear  interest  at  the  rate  of  six  per  cent,  per  annum, 
payable  in  like  gold  coin,  semi-annually,  on  the  first  days  of  November 
and  May  in  each  year,  from  the  second  day  of  May,  1906,  until  the  pay- 
ment of  the  principal  amount  thereof;  the  payment  of  the  principal  and 
interest  of  said  bonds  to  be  secured  by  a  mortgage  or  deed  of  trust  that 
shall  be  a  first  mortgage  on  the  entire  property  of  the  said  Realty  Com- 
pany as  hereinafter  described,  said  deed  of  trust  to  be  in  substantially 
the  form  of  this  indenture;  and 

Whereas,  The  bonds  so  to  be  issued  are  to  be  in  substantially  the 
form  following,  viz. : 

UNITED  STATES  OF  AMERICA. 

STATE  OF  NEW  YORK. 

No $500.00 

REMSEN  REALTY  COMPANY. 

First  Mortgage,  Six  Per  Cent.,  Gold  Bonds. 

Know  All  Men  By  These  Presents,  That  the  Remsen  Realty  Company, 
a  corporation  organized  under  the  laws  of  the  State  of  New  York,  for 
value  received,  hereby  promises  to  pay  to  the  bearer  hereof,  or  if  this  bond 
is  registered,  to  the  registered  holder  thereof,  at  the  office  of  the  Metropolis 
Trust  Company  of  the  City  of  New  York,  on  the  first  day  of  May,  nine- 
teen hundred  and  thirty-six,  in  gold  coin  of  the  United  States  of  America, 
of  the  present  standard  of  weight  and  fineness,  or  its  equivalent,  the  sum 
of  Five  Hundred  Dollars,  without  deduction  from  either  such  principal  or 
interest  for  or  on  account  of  any  United  States,  State,  municipal  or  other 
tax  or  taxes  which  the  Remsen  Realty  Company,  its  successors  or  assigns, 
may  be  required  to  pay  or  deduct  therefrom,  and  the  Remsen  Realty  Com- 
pany hereby  covenants  and  agrees  to  pay  all  such  tax  or  taxes,  and  in  the 
meantime  to  pay  interest  upon  the  said  sum  of  five  hundred  dollars  from 
and  after  the  second  day  of  May,  nineteen  hundred  and  six,  at  the  rate  of 
six  per  cent,  per  annum,  payable  in  like  gold  coin,  or  its  equivalent,  at  the 
same  place,  semi-annually,  on  the  first  days  of  November  and  May  in  each 
year,  beginning  with  the  first  day  of  November,  1906,  on  presentation  and 
surrender  of  the  coupons  hereto  attached  as  each  of  them  becomes  due. 

This  bond  is  one  of  a  series  of  six  hundred  (600)  bonds  of  the  same 
tenor  and  date,  aggregating  three  hundred  thousand  dollars  ($300,000), 
numbered  consecutively  from  one  to  six  hundred,  both  inclusive,  for  the 
sum  of  five  hundred  dollars  ($500)  each,  all  of  which  bonds  are  secured 
equally  by  a  deed  of  trust,  which  is  a  first  mortgage  upon  the  properties  of 
the  Remsen  Realty  Company,  executed  and  delivered  by  the  said  Remsen 
Realty  Company  to  the  said  Metropolis  Trust  Company,  as  Trustee,  grant- 


286  NEW    YORK    CORPORATIONS. 


ing  and  conveying  in  trust  and  mortgaging  as  security  for  the  payment 
of  the  principal  of  said  bonds  at  maturity,  at  par,  and  the  interest  on  said 
bonds,  payable  semi-annually  at  the  rate  aforesaid,  all  the  real  estate  and 
other  property  of  the  said  Remsen  Realty  Company  mentioned  and  de- 
scribed in  said  deed  of  trust,  with  full  power  to  use  and  sell  the  same  in 
the  event  of  default  in  payment  of  the  bonds  or  coupons,  or  any  of  them, 
and  apply  the  proceeds  to  the  payment  of  same  as  in  said  deed  of  trust 
provided.  This  bond  is  issued,  received  and  held  subject  to  all  and  singu- 
lar the  terms  and  conditions  contained  in  the  deed  of  trust  aforesaid. 

This  bond  is  further  secured  by  a  sinking  fund,  which  shall  consist  of 
and  be  maintained  by  the  payment  to  the  said  Metropolis  Trust  Company 
by  the  Remsen  Realty  Company  on  the  first  day  of  May,  1911,  and  on 
each  succeeding  first  day  of  May  thereafter,  until  the  redemption  of  all 
the  bonds  issued  under  said  deed  of  trust,  of  twenty-five  dollars  for  each 
thousand  dollars  of  bonds  then  issued  and  outstanding,  such  moneys  so 
paid  to  be  used  in  the  purchase  of  outstanding  bonds  at  the  lowest  price  at 
which  they  may  be  had,  not  exceeding,  however,  one  hundred  and  ten  per 
centum  of  the  face  of  said  bonds  plus  accrued  interest,  and  if  bonds  cannot 
be  so  purchased,  such  moneys  shall  be  used  in  the  redemption  of  the  bonds 
outstanding,  as  hereinafter  provided. 

This  bond  shall  not  become  obligatory  until  the  certificate  endorsed 
hereon  shall  be  signed  by  the  Trustee,  and  when  so  authenticated  by  the 
signature  of  the  Trustee  the  title  to  said  bond  shall  pass  by  delivery,  unless 
said  bond  is  registered,  and,  if  registered,  the  title  thereto  shall  pass  only 
by  transfer  on  the  books  of  said  Trust  Company,  and  no  transfer  except 
upon  said  books  shall  be  valid  unless  the  last  transfer  shall  have  been  to 
bearer,  which  shall  restore  transferability  by  delivery. 

This  bond  is  redeemable,  at  the  option  of  the  Remsen  Realty  Com- 
pany, on  any  interest  day  at  any  time  after  the  first  day  of  May,  1911,  at 
no  per  cent,  of  its  face  value,  plus  accrued  interest,  provided  that  thirty 
days'  notice  of  such  redemption  shall  be  given  the  holder  thereof  by 
notice  published  once  a  week  for  four  consecutive  weeks  prior  to  such 
redemption,  in  a  newspaper  published  in  New  York  City. 

In  Witness  Whereof,  the  said  Remsen  Realty  Company  hath 
caused  these  presents  to  be  signed  by  its  President,  and  its 
corporate  seal,  duly  attested  by  its  Secretary,  to  be  hereunto 
affixed,  and  hath  hereunto  affixed  coupons  with  the  name 
of  its  Treasurer  engraved  thereon,  and  hath  caused  this  bond 
to  be  dated  the  second  day  of  May,  A.  D.  one  thousand  nine 
hundred  and  six. 
i  CORPORATE  |  REMSEN  REALTY  COMPANY, 

(      SEAL.       \  By 

Attest :  President. 


Secretary. 


[COUPON.] 

No $15-00 

REMSEN  REALTY  COMPANY 

will  pay  to  the  bearer  at  the  office  of  the  Metropolis  Trust  Company  of 
the  City  of  New  York  the  sum  of  Fifteen  Dollars  ($15),  in  United  States 
Gold  Coin,  or  its  equivalent,  on  the  first  day  of  November,  1906,  being  six 
months'  interest  on  its  First  Mortgage,  Six  per  cent.,  Gold  Bond  No 

Treasurer. 


BOND    ISSUES.  287 

[TRUSTEE'S  CERTIFICATE.] 

The  Metropolis  Trust  Company  of  the  City  of  New  York  hereby 
certifies  that  the  within  Bond  is  one  of  a  series  of  Bonds  described  in  the 
Deed  of  Trust  therein  mentioned. 

METROPOLIS  TRUST  COMPANY  OF  THE 
CITY  OF  NEW  YORK, 

Trustee. 

By 

President. 

Now,  Therefore,  the  said  Realty  Company,  in  consideration  of  the 
premises  and  of  the  sum  of  one  dollar  to  it  in  hand  paid  by  the  said 
Trustee,  the  receipt  whereof  is  hereby  acknowledged,  and  in  order  to 
secure  the  due  payment  of  the  principal  and  interest  of  the  bonds  to  be 
issued  hereunder,  and  to  insure  the  faithful  performance  of  the  covenants 
and  agreements  herein  contained,  hath  granted,  bargained,  sold,  aliened, 
assigned,  conveyed,  transferred  and  set  over,  and  by  these  presents  doth 
grant,  bargain,  sell,  alien,  assign,  convey,  transfer  and  set  over  unto  the 
said  Trustee,  its  successors  and  assigns ; 

All  of  the  following  described  property  and  franchises  of  the  Com- 
pany, to  wit : 

(Specific  description  of  the  property  mortgaged.) 

To  Have  And  To  Hold  all  and  singular  the  said  property,  with  all 
real  estate,  buildings,  fixtures,  articles  and  property  of  every  kind,  be- 
longing to  or  pertaining  unto  the  same  unto  the  said  Trustee,  its  successors 
and  assigns  forever. 

In  Trust,  Nevertheless,  for  the  equal  pro  rata  benefit  and  security  of 
any  and  all  persons  and  parties  who  may  be  or  become  the  owners  or 
lawful  holders  of  any  of  the  bonds  to  be  issued  hereunder  and  secured 
hereby,  irrespective  of  date  or  priority  of  issue,  without  any  discrimination, 
preference  or  priority  of  any  one  bond  over  another  or  others,  by  reason 
of  priority  in  time  of  issue,  or  sale,  or  negotiation  thereof,  or  otherwise, 
and  to  secure  the  due  payment  of  each  of  the  said  bonds  together  with 
the  interest  thereof,  and  for  the  uses  and  purposes  and  upon  the  terms 
and  conditions  hereinafter  declared  and  expressed ;  and 

It  is  Hereby  Expressly  Covenanted  And  Agreed  by  and  between  the 
parties  hereto  that  all  such  bonds  are  to  be  issued,  negotiated  and  received, 
and  that  the  said  property  and  franchises  mortgaged  are  to  be  held  by 
the  Trustee  upon  and  subject  to  the  following  further  trusts,  uses,  con- 
ditions and  covenants,  that  is  to  say : 

First. — The  bonds  to  be  issued  hereunder  shall  be  executed  on  behalf 
of  the  Realty  Company,  by  its  proper  officers,  and  shall  be  delivered  to 
the  Trustee  for  certification,  and  said  Trustee  shall  certify  and  deliver 
said  bonds  so  certified  upon  the  order  of  the  Board  of  Directors  of  the 
Realty  Company.  An  order  purporting  to  be  the  order  for  delivery  of 
said  bonds  and  believed  by  the  Trustee  to  be  genuine  shall  be  conclusive 
authority  and  full  protection  to  the  Trustee  for  the  certification  and  de- 
livery of  the  bonds. 

Only  such  bonds  as  shall  bear  thereon  endorsed  the  Trustee's  certifi- 
cate, duly  executed,  shall  be  secured  by  this  indenture,  or  entitled  to  any 
lien,  right,  or  benefit  thereunder,  and  such  certificate  of  the  Trustee  upon 
any  such  bond  executed  by  the  Realty  Company  shall  be  conclusive  evi- 
dence that  the  bond  so  certified  has  been  duly  issued  thereunder,  and  that 
the  holder  is  entitled  to  the  benefit  of  the  trust  hereby  created. 

Before  certifying  or  delivering  any  bond,  all  coupons  thereon  then 
matured  shall  be  cut  off,  canceled  and  delivered  to  the  Realty  Company. 

Second. — All  bonds  secured  hereunder  may  be  registered  in  the  name 


288  NEW    YORK    CORPORATIONS. 

of  the  holder,  when  so  requested  by  such  holder,  upon  bond  transfer  books 
which  the  Realty  Company  shall  maintain  and  keep  for  such  purpose  at 
the  office  of  the  Trustee  in  the  City  of  New  York  as  long  as  any  of  the 
said  bonds  shall  remain  outstanding.  After  such  registration  such  bonds 
shall  be  transferable  only  upon  such  transfer  books,  by  the  registered 
owner  or  his  lawful  attorney,  and  any  such  transfer  shall  be  noted  on  the 
bonds  by  the  indorsement  of  the  Transfer  Agent  hereinafter  appointed. 
After  registration  of  any  bond,  the  principal  thereof  shall  be  payable  only 
to  the  registered  owner,  but  the  coupons  shall  be  payable  to  the  bearer 
upon  presentation  and  surrender  thereof,  and  shall  be  negotiable  by  de- 
livery as  if  such  bond  was  not  registered. 

Any  registered  bond  may  at  any  time  be  transferred  by  the  registered 
owner  thereof,  upon  said  transfer  books  to  bearer,  and  such  transfer  shall 
be  noted  upon  said  bond,  and  the  said  bond  shall  thereupon  be  negotiable 
by  delivery  as  if  it  had  never  been  registered,  and  each  of  said  bonds  shall 
continue  subject  to  successive  registration  and  transfer  to  bearer  at  the 
option  of  the  holder  thereof. 

For  the  purpose  of  registering  and  transferring  said  bonds  as  above 
set  forth,  the  Metropolis  Trust  Company  of  the  City  of  New  York  is 
hereby  appointed  and  constituted  Transfer  Agent  of  the  said  Realty 
Company. 

Third. — Until  default  shall  be  made  by  the  Realty  Company,  its 
successors  or  assigns,  in  the  payment  of  the  principal  or  interest  of  the 
bonds  hereby  secured,  or  any  of  them,  or  in  the  performance  of  any  of  the 
covenants,  agreements  and  provisions  on  its  part  to  be  kept  and  performed, 
as  herein  set  forth,  the  Realty  Company,  its  successors  and  assigns  shall 
be  permitted  to  possess,  manage,  use  and  occupy  the  premises  affected 
hereby,  with  all  their  appurtenances  and  belongings  in  all  respects  as  fully 
as  if  this  indenture  had  not  been  made. 

Fourth. — If  the  Realty  Company  shall  well  and  truly  pay  to  the 
holders  thereof  the  principal  of  the  bonds  secured  hereunder  and  the 
interest  moneys  becoming  due  thereon  respectively  at  the  time  and  in  the 
manner  specified  in  the  said  bonds  and  coupons  thereto  annexed,  and  shall 
keep  and  perform  all  the  covenants,  agreements  and  stipulations  on  its 
part  in  said  bonds  or  in  this  agreement  contained,  then  these  presents  and 
the  trust  hereby  created  shall  cease  and  determine,  and  the  said  Trustee 
shall  in  such  event  release  and  discharge  this  mortgage  and  the  property 
and  premises  encumbered  thereby.  The  Trustee  may  also  execute  such 
release  and  discharge  upon  production  by  the  Realty  Company  or  its 
assigns  of  all  the  bonds  issued  hereunder,  together  with  the  coupons  there- 
to belonging,  canceled  or  for  cancellation,  and  the  Trustee  shall  not  be 
under  any  liability  or  obligation  to  inquire  into  the  holding  of  said  bonds 
by  the  Realty  Company  or  its  assigns. 

Fifth. — The  said  Realty  Company,  while  it  shall  be  in  possession  of  the 
mortgaged  premises,  and  while  there  shall  be  no  existing  default  in  respect 
of  the  payment  of  the  principal  or  interest  of  any  of  the  said  bonds  of  the 
Realty  Company,  or  in  the  performance  of  any  of  the  covenants  herein, 
may,  with  the  consent  in  writing  of  the  Trustee,  sell  any  portion  of  the 
premises  heretofore  granted.  If,  in  the  opinion  of  the  Board  of  Directors 
of  the  Realty  Company,  such  sale  or  change  shall  be  expedient,  said  opinion 
shall  be  expressed  in  a  resolution  of  the  said  Board,  and  the  Trustee  may 
upon  delivery  to  it  of  a  copy  of  the  resolution  of  the  Board  of  Directors 
to  that  effect  release  from  the  lien  and  operation  of  this  indenture  any 
part  of  the  premises  hereby  mortgaged,  provided  that  the  purchase  money 
from  such  sale  or  sales  shall  be  paid  to  the  said  Trustee  for  application 
to  the  discharge  of  the  bonds  and  cpuoons  hereunder  issued,  as  set  forth 
in  Section  Fifteenth,  or  to  be  set  aside  to  be  applied  by  the  Realty  Com- 


BOND    ISSUES.  289 

pany  in  payment  for  other  real  or  personal  property  or  in  betterments  of 
or  additions  to  some  part  of  the  premises  mortgaged  hereby,  and  until  so 
applied  shall  be  held  by  the  Trustee.  Any  new  property  so  acquired  by 
the  Realty  Company  shall  ipso  facto  become  and  be  subject  to  the  lien  of 
this  indenture  as  fully  as  if  specifically  mortgaged  or  pledged  hereby,  but 
if  requested  by  the  Trustee  the  Realty  Company  shall  execute  special 
instruments  of  incumbrance  upon  such  properties. 

Sixth. — The  Realty  Company  covenants  and  agrees  that  it  shall  and 
will  promptly  pay  the  interest  and  the  principal  of  the  bonds  hereby  se- 
cured, at  the  time  and  in  the  manner  specified  in  said  bonds  and  the 
coupons  thereto  attached,  without  deduction  from  either  such  principal 
or  interest  for  or  on  account  of  any  United  States,  State,  municipal  or 
other  tax  or  taxes  which  the  Realty  Company,  its  successors  or  assigns, 
may  be  required  to  pay  or  deduct  therefrom,  and  the  Realty  Company 
hereby  covenants  and  agrees  to  pay  all  such  tax  or  taxes. 

The  Realty  Company  further  covenants  and  agrees  that  it  shall  and 
will,  from  time  to  time,  promptly  pay  and  discharge,  or  cause  to  be  paid 
and  discharged,  all  taxes,  rates,  levies  or  assessments  and  charges,  ordinary 
and  extraordinary,  levied  or  imposed  upon  the  premises  and  properties 
mortgaged  to  the  Trustee  to  secure  the  payment  of  the  bonds  issued  here- 
tmder,  or  on  any  part  thereof,  the  lien  of  which  might  or  could  be  held 
prior  or  equal  to  the  lien  of  this  indenture,  so  that  the  same  shall  not  fall 
into  arrears  and  so  that  the  priority  of  this  indenture  given  to  secure  said 
bonds  shall  be  preserved. 

The  Realty  Company  further  covenants  and  agrees  that  it  will  not 
create  nor  suffer  any  mechanic's,  laborer's  or  other  similar  liens  to  be 
created  upon  the  premises  and  property  mortgaged  to  secure  the  bonds 
issued  hereunder,  whereby  the  lien  of  this  indenture  might  or  could  be 
impaired,  until  the  bonds  so  secured  hereunder,  with  all  the  interest  ac- 
crued thereon,  shall  have  been  fully  paid  and  satisfied. 

Seventh. — A  sinking  fund  shall  be  created  for  the  redemption  of  the 
bonds  issued  hereunder.  It  shall  consist  of  and  be  maintained  by  the 
payment  to  the  Trustee  by  the  Realty  Company  on  the  first  day  of  May, 
1911,  and  on  each  succeeding  first  day  of  May  thereafter  until  the  redemp- 
tion of  all  the  bonds  issued  hereunder,  of  twenty-five  dollars  for  each 
thousand  dollars  of  bonds  then  issued  and  outstanding,  such  moneys  so 
paid  to  be  used  in  the  purchase  of  outstanding  bonds  at  the  lowest  price  at 
which  they  may  be  had,  not  exceeding,  however,  one  hundred  and  ten  per 
centum  of  the  face  value  of  said  bonds,  plus  accrued  interest,  and  if  bonds 
cannot  be  so  purchased,  such  money  shall  be  used  in  redemption  of  bonds 
outstanding  as  provided  and  set  forth  in  Section  Fifteenth. 

Eighth. — The  Realty  Company  covenants  and  agrees  that  this  deed  of 
trust  delivered  to  the  Trustee  shall  be  a  first  mortgage  upon  the  premises 
and  property  affected  thereby,  that  the  same  shall  be  duly  executed  and 
recorded  in  the  proper  office  of  registry  in  the  County  of  New  York  where 
the  said  premises  are  situated,  and  that  the  Realty  Company  will  execute 
and  deliver  such  further  deeds,  transfers,  pledges  and  assurances  as  the 
Trustee,  under  the  advice  of  counsel  learned  in  the  law,  shall  reasonably 
require  for  the  better  accomplishing  of  the  purposes  and  provisions  of  this 
indenture. 

Ninth. — The  Realty  Company  covenants  and  agrees  that  all  buildings, 
structures  and  machinery  situated  upon  the  properties  affected  by  this 
mortgage  given  to  secure  the  bonds  issued  hereunder,  shall  be  kept  insured 
during  the  entire  term  of  this  indenture  to  the  amount  of  insurance  on  such 
properties  usually  allowed  by  insurance  companies,  against  loss  or  damage 
by  fire,  and  against  loss  or  damage  from  boiler  explosions,  and  that  the 
said  Realty  Company  shall  and  will  pay  all  premiums  upon  all  policies  for 


290  NEW    YORK    CORPORATIONS. 

such  insurance.  All  such  policies  shall  be  made  payable  to  the  Trustee, 
and  shall  be  deposited  with  it  for  the  benefit  and  protection  of  the  bond- 
holders should  any  loss  occur  from  fire  or  boiler  explosion  during  the  term 
of  this  indenture.  Any  payments  and  insurance  made  under  such  policies 
may  be  applied  directly  by  the  Trustee  to  the  repairing  or  replacement  of 
the  property  damaged  or  destroyed,  or  it  may  authorize  the  Realty  Com- 
pany to  contract  for  such  repairs  or  replacements,  and  pay  part  or  all  of 
the  cost  thereof  from  said  insurance  moneys.  The  Trustee  may  in  its 
discretion  employ  such  insurance  moneys  in  the  purchase  or  redemption 
of  outstanding  bonds  as  set  forth  in  Section  Fifteenth,  instead  of  expend- 
ing the  same  for  repairs  or  replacement  of  property  damaged  or  destroyed. 

Tenth. — The  Realty  Company  covenants  and  agrees  that  it  shall  and 
will  at  all  times  keep  the  buildings,  structures  and  appurtenances  thereto, 
or  any  replacement  or  replacements  thereof  in  good  order  and  repair,  pro- 
vided, however,  that  in  the  event  of  total  destruction  of  any  building,  the 
Realty  Company  may,  with  the  consent  of  the  Trustee,  add  to  the  insur- 
ance moneys  received  thereon  by  the  Trustee  sufficient  cash  payments  to 
release  the  special  property  upon  which  such  building  was  situated,  under 
the  terms  set  forth  in  Section  Fifth,  whereupon  the  Trustee  shall  release 
the  said  property  and  the  Realty  Company  may  dispose  of  the  same  at  its 
discretion. 

Eleventh. — The  Realty  Company  covenants  and  agrees  that  when  and 
as  the  coupons  attached  to  the  bonds  issued  hereunder  are  paid,  the 
coupons  shall  be  canceled,  and  that  no  purchase  or  sale  of  the  said  cou- 
pons or  advance  or  loan  upon  the  same,  made  on  behalf  of,  or  at  the 
request  of,  or  with  the  privity  of  the  said  Realty  Company,  and  no  re- 
demption of  the  said  coupons,  or  any  of  them,  by  any  guarantor  of  the 
payment  of  the  same,  shall  be  taken  or  operate  as  keeping  the  said  coupons 
alive  or  in  force,  under  this  indenture  as  against  the  holders  of  the  bonds 
secured  hereunder  and  of  the  coupons  annexed  thereto. 

Twelfth. — In  case  default  shall  be  made  in  the  payment  of  interest  on 
any  of  the  bonds  issued  hereunder,  and  such  default  shall  continue  for  a 
period  of  six  months  after  demand,  or  in  case  default  shall  be  made  in  the 
performance  of  any  other  covenant  or  condition  hereby  required  to  be 
kept  or  performed  by  the  Realty  Company,  and  if  the  same  shall  continue 
for  a  period  of  six  months  after  demand  made  for  such  performance,  the 
Trustee  may,  and,  upon  the  written  request  of  the  majority  in  amount 
of  the  holders  of  the  bonds  then  outstanding,  shall  by  written  notice  to 
the  Realty  Company,  declare  the  principal  of  all  the  bonds  hereby  secured, 
then  outstanding,  to  be,  and  the  same  shall  thereupon  become,  immediately 
due  and  payable. 

Thirteenth. — In  case  default  shall  be  made  in  the  payments  of  the 
principal  or  interest  of  any  of  the  said  bonds  when  the  same  is  due  and 
payable  according  to  the  tenor  thereof,  or  if  default  shall  be  made  in  the 
performance  of  any  other  covenant  or  condition,  hereby  required  to  be 
kept  or  performed  by  the  Realty  Company,  and  if  any  such  default  in  pay- 
ment or  performance  shall  continue  for  a  period  of  six  months  after 
demand  by  the  Trustee  then  and  in  every  such  case  the  Trustee,  or  its 
successors  in  the  Trust,  may  by  its  attorneys  and  agents  enter  into  and 
upon  all  and  singular  the  premises  hereby  conveyed,  and  each  and  every 
part  thereof  and  operate  and  conduct  the  business  of  the  said  Realty  Com- 
pany in  all  respects  as  the  said  Realty  Company  might  do  in  possession  of 
the  same ;  and  may  collect  and  receive  all  rents,  income,  revenue  and  profit 
to  be  derived  therefrom,  and  after  deducting  all  proper  and  necessary 
outlays  and  expenses  as  well  as  a  just  compensation  for  its  own  services 
and  for  the  services  of  such  attorneys,  agents  and  assistants  as  it  may,  in 
its  discretion,  employ  for  any  of  the  purposes  aforesaid,  said  Trustee  shall 
apply  the  rest  and  residue  of  the  moneys  received  by  it  pro  rata  to  the 


BOND    ISSUES.  291 

payment  of  the  interest  due  upon  such  of  said  bonds  as  shall  then  be  out- 
standing. In  any  such  case  if  payment  of  all  interest  and  any  principal 
due  shall  be  made  in  full  and  no  suit  to  foreclose  this  mortgage  shall  have 
been  begun  or  sale  made,  the  said  Trustee  shall  restore  the  possession 
of  the  premises  so  entered,  to  the  Realty  Company  without  prejudice  to 
similar  entry  later  in  case  of  similar  default. 

Fourteenth. — In  case  default  shall  be  made  in  the  payment  of  the 
principal  or  interest  of  the  said  bonds,  when  the  same  is  due  and  payable 
according  to  the  tenor  thereof,  or  if  default  shall  be  made  in  the  perform- 
ance of  any  other  covenant  or  condition  hereby  required  to  be  kept  or 
performed  by  the  Realty  Company,  and  if  any  such  default  in  payment 
or  performance  shall  continue  for  the  period  of  six  months  after  demand, 
the  Trustee  may,  and  upon  written  request  of  the  holders  of  a  majority 
in  amount  of  the  registered  bonds  then  outstanding,  being  first  indemnified 
by  them  to  its  satisfaction,  shall  sell  or  foreclose  upon,  according  to  the 
proceedings  by  law  prescribed  in  this  State,  all  or  any  portion  of  the 
property  held  by  it  under  this  indenture,  and  such  proceedings  of  sale  or 
foreclosure  shall  be  a  perpetual  bar  both  at  law  and  in  equity  against  the 
Realty  Company  and  against  all  persons  claiming  by,  from  or  under  it. 
After  deducting  from  the  proceeds  of  such  sale  or  foreclosure,  the  proper 
allowance  for  all  expenses  thereof,  including  attorney's  and  counsel  fees, 
and  all  other  expenses  or  advances  which  may  have  been  made  or  incurred 
by  said  Trustee  in  respect  of  the  said  property  or  the  appurtenances  there- 
to, and  all  payments  which  may  have  been  made  by  it  for  taxes  or  assess- 
ments, or  in  satisfaction  of  charges  and  liens,  prior  to  the  lien  of  the  mort- 
gages and  deeds  of  trust  to  the  Trustee  thereon,  or  for  insurance,  as  well 
as  reasonable  compensation  for  its  own  services,  the  Trustee  shall  apply 
the  proceeds  to  the  payments  of  such  bonds  and  the  coupons  thereon  as 
may  be  at  the  time  unpaid,  without  giving  preference  or  priority  to  one 
bond  over  another,  but  ratably  to  the  aggregate  amount  of  such  unpaid 
principal  and  accrued  and  unpaid  interest,  and  if  any  surplus  remain  after 
the  payment  in  full  of  the  principal  and  interest  of  said  bonds,  then  the 
Trustee  shall  transfer  and  pay  over  such  surplus  to  the  Realty  Company. 

Fifteenth. — It  is  covenanted  and  agreed  between  the  parties  hereto  and 
any  future  holders  of  the  bonds  that  the  said  bonds  are  redeemable,  at  the 
option  of  the  party  of  the  first  part,  on  any  interest  day  after  the  first  day 
of  May,  1911,  at  one  hundred  and  ten  per  cent,  of  their  face  plus  accrued 
interest,  provided  that  thirty  days'  notice  of  such  redemption  shall  be  given 
the  holders  thereof,  by  notice  published  once  a  week  for  four  consecutive 
weeks  prior  to  such  redemption,  in  a  newspaper  published  in  New  York 
City.  If  said  bonds  are  registered,  then  a  copy  of  the  said  notices  shall  be 
sent  to  the  post  office  address  of  the  parties  in  whose  names  said  bonds 
are  registered. 

Whenever  it  is  desired  to  redeem  any  of  said  bonds,  the  Board  of 
Directors  of  the  Realty  Company  shall  pass  a  resolution  setting  forth  the 
amount  of  bonds  (at  their  par  value)  desired  to  be  redeemed.  The  Presi- 
dent of  the  Realty  Company  shall  thereupon  draw  by  lot  the  numbers  of 
the  bonds  to  be  redeemed,  and  he  shall  thereupon  certify  that  such  bonds 
were  drawn  for  redemption,  which  certificate  shall  be  entered  upon  the 
minutes  of  the  Realty  Company,  and  a  duplicate  copy  shall  be  delivered 
to  the  Trustee.  Said  bonds  having  been  so  drawn  for  redemption  shall 
become  due  and  payable  on  the  succeeding  interest  payment  date,  provided 
that  the  date  of  first  publication  and  the  date  of  mailing  notice  to  register- 
ed holders  of  bonds  shall  have  been  not  less  than  thirty  days  prior  to  such 
interest  payment  date,  and  the  said  bonds  shall  from  such  interest  pay- 
ment date,  cease  to  draw  interest,  and  the  said  Realty  Company  may,  upon 
the  deposit  of  the  proper  amount  with  the  Trustee,  be  privileged  to  con- 
sider said  bonds  as  paid  and  canceled. 


NEW    YORK    CORPORATIONS. 

Sixteenth. — The  Trustee  may  resign  the  trust  hereby  created  upon 
giving  sixty  days'  notice  in  writing  to  the  Realty  Company.  In  case  of  the 
resignation  of  the  Trustee,  or  of  its  dissolution  or  insolvency,  or  removal 
for  cause  as  Trustee  hereunder,  it  shall  be  the  duty  of  the  Realty  Com 
pany  to  call  a  meeting  of  the  bondholders  by  printed  notice,  published  in 
two  of  the  public  newspapers  of  New  York  City,  once  a  week  for  three 
consecutive  weeks  next  preceding  such  meeting,  calling  such  meeting  to  be 
held  in  the  said  City  of  New  York,  and  by  mailing  notice  of  the  same  to 
each  of  the  registered  bondholders  not  less  than  ten  days  before  the  date 
of  such  meeting.  At  the  time  and  place  specified  in  such  notice,  the  holders 
of  said  bonds,  in  such  meeting  assembled,  shall  organize  and  proceed  to 
elect  a  suitable  corporation  to  act  as  Trustee  under  this  agreement,  and  a 
majority  in  amount  of  such  bonds  legally  represented  at  such  meeting  shall 
be  competent  to  elect  such  new  Trustee,  and  the  corporation  so  elected 
shall  immediately  upon  election  and  on  its  acceptance  in  writing  of  such 
trust  become  vested  with  all  the  estate,  trusts,  rights,  powers  and  duties 
of  the  present  Trustee  herein,  and  shall  be  entitled  to  receive  from  the 
present  Trustee  or  its  legal  representatives  all  moneys,  mortgages  and 
assurances  appertaining  or  relating  to  this  trust  and  the  due  execution 
thereof. 

Seventeenth.— It  is  covenanted  and  agreed  by  the  parties  hereto,  and 
all  the  holders  of  bonds  hereunder,  as  conditions  precedent  to  the  accept- 
ance of  the  said  trust  by  the  said  Trustee,  or  any  successor  thereto,  as 
follows : 

The  Trustee  shall  not  be  answerable  for  any  act,  default,  neglect  or 
misconduct  of  any  of  its  agents  or  employees,  by  it  appointed  or  employed, 
in  connection  with  the  execution  of  any  of  the  said  trusts,  nor  in  any 
other  manner  answerable  or  accountable,  under  any  circumstances  what- 
soever, except  for  bad  faith.  The  recitals  contained  herein,  or  in  the 
bonds,  as  to  priority  of  lien,  or  any  other  matter  whatsoever,  are  made  by 
and  on  the  part  of  the  Realty  Company,  and  the  Trustee  assumes  no 
responsibility  for  the  correctness  of  the  same.  It  shall  not  be  the  duty  of 
the  Trustee  to  file  or  record  at  any  time  this  deed  of  trust  or  any  other 
mortgages  or  deeds  of  trust  that  may  be  required  hereunder,  nor  to  do 
any  other  act  or  acts  suitable  and  proper  to  be  done  for  the  creation  or 
continuance  of  the  lien  or  liens  thereby  intended,  nor  to  effect  insurance 
against  fire  or  explosion,  nor  to  renew  any  policies  of  insurance,  nor  to 
keep  itself  informed  as  to  the  payment  of  any  taxes  or  assessments,  nor 
to  require  such  payments  to  be  made.  The  Trustee  may,  however,  in  its 
discretion,  do  any  or  all  of  these  things.  Neither  shall  the  Trustee  be  held 
responsible  for  the  nature  or  amount  of  the  security  mortgaged  to  it  here- 
under. The  Trustee  shall  not  be  compelled  to  take  any  action,  as  Trustee, 
under  this  mortgage,  unless  properly  requested  and  in  every  respect  indem- 
nified to  its  full  satisfaction.  The  Trustee  shall  be  entitled  to  reasonable 
compensation  for  all  services  rendered  hereunder  or  in  connection  with  the 
trust.  This  compensation,  together  with  any  and  all  necessary  and  rea- 
sonable expenses,  charges,  counsel  fees  and  other  disbursements  incurred 
by  the  Trustee  in  the  discharge  of  its  duties,  as  such,  shall  be  paid  by  the 
Realty  Company,  or  out  of  the  trust  estate  upon  which  they  are  hereby 
made  a  lien,  prior  to  that  of  the  bonds  issued  hereunder.  The  Trustee 
shall  be  protected  in  acting  upon  any  notice,  consent,  request,  certificate, 
bond  or  other  paper  or  document  believed  by  it  to  be  genuine  and  signed 
by  the  proper  party.  The  Trustee  shall  be  held  responsible  for  the  due 
authentication  by  certificate  of  the  bonds  issued  hereunder,  and  for  the 
custody  and  disposition,  as  herein  provided,  of  the  securities  and  moneys 
received  by  it  hereunder. 

Eighteenth. — It  is  covenanted  and  agreed  between  the  parties  hereto 
that  the  words  "Realty  Company"  when  used  in  these  presents  mean  the 


BOND    ISSUES.  293 

party  issuing  the  bonds  herein  referred  to ;  that  the  word  "Trustee"  means 
the  corporation  charged  with  the  execution  of  the  trust  herein,  whether 
the  same  be  the  Metropolis  Trust  Company  of  the  City  of  New  York,  or 
any  successor  or  successors  in  the  trust  hereby  created ;  that  the  word 
"bonds"  means  the  bonds  issued  hereunder ;  and  the  words  "Trustee," 
"bond,"  "bondholder"  and  "holder"  shall  include  the  plural  as  well  as  the 
singular  number  and  the  term  "majority"  shall  signify  the  majority  in 
amount. 

Nineteenth. — It  is  covenanted  and  agreed  that  this  indenture  may  be 
executed  in  several  counterparts,  each  of  which  so  executed  shall  be 
deemed  to  be  an  original,  and  such  counterparts  shall  together  constitute 
but  one  and  the  same  instrument. 

In  Witness  Whereof,  the  Remsen  Realty  Company  has  caused  its 
corporate  name  to  be  hereunto  subscribed  by  its  President 
and  its  corporate  seal  to  be  affixed  and  attested  by  its  Secre- 
tary and  the  METROPOLIS  TRUST  COMPANY  OF  THE  CITY  OF 
NEW  YORK,  in  token  of  its  acceptance  of  the  trust  hereby 
created,  has  caused  its  corporate  name  and  seal  to  be  here- 
unto affixed  by  its  President,  and  attested  by  its  Secretary 
on  this  twelfth  day  of  March,  one  thousand  nine  hundred 
and  six. 

REMSEN  REALTY  COMPANY, 

j  CORPORATE  )  By  FRANKLIN  MOFFAT, 

I      SEAL.       )  President. 

ATTEST  : 

CHARLES  E.  WARREN, 
Secretary. 
METROPOLIS  TRUST  COMPANY  OF  THE  CITY  OF  NEW  YORK, 

As  Trustee. 

j  CORPORATE  )  By  STANDFORD  NIVENS, 

I      SEAL.       f  President. 

ATTEST  : 

BARTLEY  HAYDEN, 

Secretary. 
(Notarial  acknowledgment  by  president  of  each  corporation.) 

(See  Form  39  for  acknowledgment.) 

It  will  be  understood  that  the  preceding  form  has,  on 
account  of  space  limits,  been  reduced  to  its  simplest  terms. 
An  ordinary  deed  of  trust  will  frequently  cover  from  forty  to 
fifty  pages,  and,  where  the  matter  is  complex,  will  largely  ex- 
ceed this.  The  form  as  given  is,  however,  a  good  working 
model,  has  received  the  endorsement  of  some  of  the  leading 
corporation  attorneys  of  the  state  and  will  be  found  a  safe 
and  excellent  basis  upon  which  to  build  up  the  more  elaborate 
instruments  when  required.  It  is  hardly  necessary  to  state 
that  under  any  circumstances  a  bond  issue  demands  the  ser- 
vices of  an  experienced  and  careful  lawyer. 


PART  III.     STATUTES. 
THE  BUSINESS  CORPORATIONS  LAW. 


Laws  of  1890,  Chapter  567,  as  Amended  to  January  ist,  1906. 

SECTION  i.  Short  title  and  limitation  of  chapter. 

2.  Incorporation. 

3.  Restriction   upon   commencement  of  business. 

4.  Reorganization  of  existing  corporations. 

5.  Payment  of   capital   stock. 

6.  Full   liability  corporations. 

7.  Extension  of  business. 

8.  Consolidation   of  corporations. 

9.  Submission  of  consolidation  agreement  to  stockholders. 

10.  Powers  of  consolidated  corporations. 

11.  Transfer  of  property  of  old  corporations  to  consolidated 

corporations. 

12.  Rights  of  creditors  of  old  corporations. 

13.  District  steam  corporations. 

14.  Examination  of  meters  by  agent  of  district  steam  corpora- 

tions. 

15.  Entry  by  agent  of  district  steam   corporation   to  cut  off 

steam. 

16.  Water  companies. 

17.  Condemnation  proceedings  by  certain  corporations. 

§  i.  Short  title  and  limitation  of  chapter. — This  chapter  shall  be 
known  as  the  business  corporations  law. 

§  2.  Incorporation. — Three  or  more  persons  may  become  a  stock 
corporation  for  any  lawful  business  purpose  or  purposes  other  than 
a  moneyed  corporation,  or  a  corporation  provided  for  by  the  banking, 
the  insurance,  the  railroad  and  the  transportation  corporation  laws, 
by  making,  signing,  acknowledging  and  filing  a  certificate  which  shall 
contain: 

1.  The  name  of  the  proposed  corporation. 

2.  The  purpose  or  purposes  for  which  it  is  to  be  formed. 

3.  The  amount  of  the  capital  stock,  and  if  any  portion  be  pre- 
ferred stock,  the  preferences  thereof. 

4.  The  number  of  shares  of  which  the  capital  stock  shall  con- 
sist,  each   of   which   shall   not  be   less   than   five   nor   more   than   one 
hundred  dollars,  and  the  amount  of  capital  not  less  than  five  hundred 
dollars,  with  which   said   corporation   will  begin   business. 

5.  The  city,  village  or  town  in  which  its  principal  business  office 

294 


§§  3"5l  THE  BUSINESS  CORPORATIONS  LAW.  295 

is  to  be  located.     If  it  is  to  be  located  in  the  city  of  New  York,  the 
borough  therein  in  which  it  is  to  be  located. 

6.  Its   duration. 

7.  The  number  of  its  directors,  not  less  than  three. 

8.  The  names  and  postoffice  addresses  of  the  directors  for  the 
first  year. 

9.  The  names  and  post-office  addresses  of  the  subscribers  to  the 
certificate,  and  a  statement  of  the  number  of  shares  of  stock  which 
each  agrees  to  take  in  the  corporation. 

If  meetings  of  the  board  of  directors  are  to  be  held  only  within 
the  state  the  certificate  or  by-laws  must  so  provide.  The  certificate 
may  contain  any  other  provision  for  the  regulation  of  the  business 
and  conduct  of  the  affairs  of  the  corporation  and  any  limitation  upon 
its  powers,  and  upon  the  powers  of  its  directors  and  stockholders 
which  does  not  exempt  them  from  any  obligation  or  from  the  per- 
formance of  any  duty  imposed  by  law. 

5  3.  Restrictions  upon  commencement  of  business. — No  such  cor- 
poration shall  incur  any  debts  until  the  amount  of  capital  specified  in 
its  certificate  of  incorporation,  as  the  amount  of  capital'  with  which 
it  will  begin  business,  shall  have  been  paid  in  in  money  or  property. 

§  4.  Reorganization  of  existing  corporations. — Any  stock  corpor- 
ation heretofore  organized,  except  a  moneyed  or  transportation  cor- 
poration, or  a  corporation  the  business  of  which  partakes  of  the  na- 
ture of  banking  or  insurance,  may  reincorporate  under  this  chapter  in 
the  following  manner:  The  directors  of  the  corporation  shall  call  a 
meeting  of  the  stockholders  thereof  by  publishing  a  notice,  stating 
the  time,  place  and  object  of  the  meeting,  signed  by  at  least  a  ma- 
jority of  them,  in  a  newspaper  of  the  county  in  which  its  principal 
business  office  is  situated,  once  a  week,  for,  at  least,  three  successive 
weeks,  and  by  serving  upon  each  stockholder,  at  least  three  weeks 
before  the  meeting,  a  copy  of  such  notice  either  personally  or  by 
depositing  it  in  the  post-office,  postage  prepaid,  addressed  to  him  at 
his  last-known  post-office  address.  The  stockholders  shall  meet  at 
the  time  and  place  specified  in  the  notice  and  organize  by  choosing 
one  of  the  directors  chairman,  and  a  suitable  secretary,  and  shall 
then  take  a  vote  of  those  present  in  person  or  by  proxy  upon  the 
proposition  to  reincorporate  under  this  chapter,  and  if  votes  repre- 
senting a  majority  of  all  the  stock  of  the  corporation  shall  be  cast 
in  favor  of  the  proposition,  the  officers  of  the  meeting  shall  execute 
and  acknowledge  a  certificate  of  the  proceedings,  which  certificate 
shall  also  contain  the  statements  required  by  section  two  of  this 
chapter,  and  shall  be  filed  in  the  offices  where  certificates  of  incor- 
poration under  this  chapter  are  required  to  be  filed.  From  the  time 
of  such  filing  such  corporation  shall  be  deemed  to  be  a  corporation 
organized  under  this  chapter,  and  if  originally  organized  or  incor- 
porated under  a  general  law  of  this  state,  it  shall  have  and  exercise 
all  such  rights  and  franchises  as  it  has  heretofore  had  and  exercised 
under  the  laws  pursuant  to  which  it  was  originally  incorporated,  and 
such  reorganization  shall  not  in  any  way  affect,  change  or  diminish 
the  existing  liabilities  of  the  corporation. 

§  5.  Payment  of  capital  stock. — One-half  of  the  capital  stock  of 
every  such  corporation  shall  be  paid  in  within  one  year  from  its  in- 
corporation, or  the  corporation  shall  be  dissolved,  and  the  directors 


296  NEW    YORK    CORPORATIONS.  [§§6-8 

within  thirty  days  after  such  payment  shall  make  a  certificate  of  the 
fact  of  such  payment,  which  shall  be  signed  and  acknowledged  by  a 
majority  of  the  directors,  and  verified  by  the  president  or  vice- 
president  and  secretary  or  treasurer,  and  filed  in  the  offices  where 
the  certificates  of  incorporation  are  filed.  The  dissolution  of  any 
such  corporation  for  any  cause  shall  not  take  away  or  impair  any 
remedy  against  it,  its  stockholders  or  officers,  for  any  liabilities  in- 
curred previous  to  its  dissolution. 

§  6.  Full  liability  corporations. — Every  corporation  formed  un- 
der this  chapter  may  be  or  become  a  full  liability  corporation  by 
inserting  a  statement  in  the  certificate  of  incorporation,  that  the 
corporation  thereby  formed  is  intended  to  be  a  full  liability  cor- 
poration; and  in  case  of  an  existing  corporation,  which  is  not  a 
full  liability  corporation,  it  may  become  such  by  filing  in  the 
offices  where  certificates  of  incorporation  are  required  to  be  filed,  a 
supplemental  certificate  stating  that  thereafter  the  corporation  in- 
tends to  be  a  full  liability  corporation,  which  certificate  shall  be  exe- 
cuted and  acknowledged  by  the  president  and  treasurer  of  the  cor- 
poration or  by  the  board  of  directors,  and  shall  have  annexed  thereto 
a  copy  of  a  resolution,  adopted  by  a  two-thirds  vote  of  the  board  of 
directors,  and  the  written  consent  of  all  the  stockholders  of  the  cor- 
poration, authorizing  and  consenting  to  the  change  of  the  corporation 
to  a  full  liability  corporation.  If  the  corporation  is  formed  as  or 
becomes  a  full  liability  corporation  all  the  stockholders  of  the  cor- 
poration shall  be  severally  individually  liable  to  its  creditors  for  all 
its  debts  and  liabilities,  and  may  be  joined  as  defendants  in  any  action 
against  it.  No  execution  shall  issue  against  any  stockholder  individ- 
ually until  execution  has  been  issued  against  the  corporation  and  re- 
turned unsatisfied,  and  all  the  stockholders  shall  contribute  a  propor- 
tionate share,  according  to  the  number  of  shares  of  stock  owned  by 
each,  of  the  amount  paid  by  any  stockholder  on  a  judgment  recovered 
against  him  individually  for  a  debt  of  the  corporation,  and  he  may 
recover  from  the  other  stockholders  in  the  corporation  in  a  joint  or 
several  action  the  proper  portion  due  by  them  and  each  of  them, 
of  the  amount  paid  by  him  on  any  such  judgment. 

§  7.     Extension  of  business. — (Repealed  by  L.  1895,  Ch.  671.) 

§  8.  Consolidation  of  corporations. — Any  two  or  more  corpora- 
tions organized  under  the  laws  of  this  state  for  the  purpose  of  carry- 
ing on  any  kind  of  business  of  the  same  or  of  a  similar  nature,  which 
a  corporation  organized  under  this  chapter  might  carry  on,  may  con- 
solidate such  corporations  into  a  single  corporation,  as  follows:  The 
respective  corporations  may  enter  into  and  make  an  agreement  signed 
by  a  majority  of  their  respective  boards  of  directors  and  under  their 
respective  corporate  seals,  for  the  consolidation  of  such  corporations, 
prescribing  the  terms  and  conditions  thereof,  the  mode  of  carrying 
the  same  into  effect,  the  name  of  the  new  corporation,  the  number 
of  directors  who  shall  manage  its  affairs,  not  less  than  three,  the 
names  and  post-office  addresses  of  the  directors  for  the  first  year, 
the  term  of  its  existence,  not  exceeding  fifty  years,  the  name  of  the 
town  or  towns,  county  or  counties,  in  which  its  operations  are  to  be 
carried  on,  the  name  of  the  town  or  city  and  county  in  this  state  in 
which  its  principal  place  of  business  is  to  be  situated,  the  amount  of 
its  capital  stock,  which  shall  not  be  larger  in  amount  than  the  fair 
aggregate  value  of  the  property,  franchises  and  rights  of  such  cor- 


§  9]  THE  BUSINESS  CORPORATIONS  LAW.  297 

porations,  and  the  number  of  shares  into  which  the  same  is  to  be 
divided,  the  manner  of  distributing  such  capital  stock  among  the 
holders  thereof,  and  if  such  corporations,  or  either  of  them,  shall  have 
been  organized  for  the  purpose  of  carrying  on  any  part  of  its  business 
in  any  place  out  of  this  state,  the  agreement  shall  so  state,  with  such 
other  particulars  as  they  may  deem  necessary. 

§  9.  Submission  of  consolidation  agreement  to  stockholders. — 
Such  agreement  shall  be  submitted  to  the  stockholders  of  each  of 
such  corporations,  at  a  meeting  thereof  to  be  called  upon  notice  of 
at  least  two  weeks,  specifying  the  time,  place  and  object  thereof,  and 
addressed  to  each  at  his  last  known  post-office  address,  and  deposited 
in  the  post-office,  postage  prepaid,  and  published  for  at  least  two  suc- 
cessive weeks  in  one  of  the  newspapers  in  each  of  the  counties  of  this 
State  in  which  either  of  such  corporations  shall  have  its  place  of 
business,  and  if  such  agreement  shall  be  approved  at  each  of  such 
meetings  of  the  respective  stockholders  separately,  by  the  vote  by 
ballot  of  the  stockholders  owning  at  least  two-thirds  of  the  stock, 
the  same  shall  be  the  agreement  of  such  corporations,  and  a  sworn 
copy  of  the  proceedings  of  such  meetings,  made  by  the  secretaries 
thereof,  respectively,  and  attached  thereto,  shall  be  presumptive  evi- 
dence of  the  holding  and  action  of  such  meetings.  Such  agreement 
and  verified  copy  of  proceedings  of  such  meetings  shall  be  made  in 
duplicate,  one  of  which  shall  be  filed  in  the  office  of  the  Secretary  of 
State,  and  the  other  in  the  office  of  the  clerk  of  the  county  where  the 
principal  business  office  of  the  new  corporation  is  to  be  situated  in 
this  State,  and  thereupon  such  corporations  shall  be  merged  into  the 
new  corporation  specified  in  such  agreements,  to  be  known  by  the 
corporate  name  therein  mentioned,  and  the  provisions  of  such  agree- 
ment shall  be  carried  into  effect  as  therein  provided.  If  any  stock- 
holder, not  voting  in  favor  of  such  agreement  to  consolidate,  shall  at 
such  meeting,  or  within  twenty  days  thereafter,  object  to  such  con- 
solidation and  demand  payment  for  his  stock,  such  stockholder  or 
such  new  corporation,  if  the  consolidation  takes  effect  at  any  time 
thereafter,  may  at  any  time  within  sixty  days  after  such  meeting 
apply  to  the  Supreme  Court  at  any  special  term  thereof  held  in  the 
district  in  which  any  county  is  situated  in  which  such  new  corpora- 
tion may  have  its  place  of  business,  upon  at  least  eight  days'  notice 
to  the  new  corporation,  for  the  appointment  of  three  persons  to  ap- 
praise the  value  of  such  stock,  and  the  court  shall  appoint  three  such 
appraisers  and  designate  the  time  and  place  of  their  first  meeting, 
with  such  directions  in  regard  to  their  proceedings  as  shall  be  deemed 
proper,  and  also  direct  the  manner  in  which  payment  for  such  stock 
shall  be  made  to  such  stockholder.  The  court  may  fill  any  vacancy 
in  the  board  of  appraisers  occurring  by  refusal  or  neglect  to  serve 
or  otherwise.  The  appraisers  shall  meet  at  the  time  and  place  desig- 
nated, and  they  or  any  two  of  them,  after  being  duly  sworn  honestly 
and  faithfully  to  discharge  their  duties,  shall  estimate  and  certify  the 
value  of  such  stock  at  the  time  of  such  dissent,  and  deliver  one  copy 
to  such  new  corporation,  and  another  to  such  stockholder  if  de- 
manded; the  charges  and  expenses  of  the  appraisers  shall  be  paid  by 
the  new  corporation.  When  the  new  corporation  shall  have  paid  the 
amount  of  such  appraisal,  as  directed  by  the  court,  such  stockholder 
shall  cease  to  have  any  interest  in  such  stock  and  in  the  corporate 
property  of  such  corporation,  and  such  stock  may  be  held  or  disposed 
of  by  such  new  corporation.  Where  any  consolidation  has  been  here- 


NEW   YORK   CORPORATIONS.  [§§  IO-I2 

tofore  or  shall  be  hereafter  effected  pursuant  to  the  laws  of  this  State, 
and  the  holders  of  ninety  per  centum  of  the  capital  stock  of  each  of 
such  corporations  have  voted  in  favor  of  such  agreement  to  consoli- 
date, if  any  stockholder  not  voting  in  favor  of  such  consolidation 
shall  fail  to  exchange  his  stock  for  stock  of  such  new  corporation 
within  sixty  days  after  this  act  shall  go  into  effect,  or,  in  case  of  a 
consolidation  hereafter  effected,  within  sixty  days  after  he  shall 
have  become  entitled  to  make  such  exchange,  such  new  corporation, 
may,  at  any  time  thereafter,  upon  at  least  eight  days'  notice  to  such 
stockholder,  to  be  given  personally,  within  the  State,  if  possible,  and 
if  not,  then  in  such  manner  as  the  court  shall  direct,  apply  to  the 
court,  as  hereinbefore  provided,  for  the  appointment  of  three  persons 
to  appraise  the  value  of  such  stock  at  the  time  of  the  expiration  of 
such  sixty  days.  Upon  the  completion  of  the  appraisal  in  the  man- 
ner hereinbefore  provided  for,  and  the  payment  by  such  new  corpora- 
tion of  the  amount  of  such  appraisal,  as  directed  by  the  court,  such 
stockholder  shall  cease  to  have  any  interest  in  such  stock,  and  in  the 
corporate  property  of  such  corporation,  and  such  stock  may  be  held 
or  disposed  of  by  such  new  corporation. 

§  10.  Powers  of  consolidated  corporations. — Such  new  corpora- 
tion in  addition  to  the  general  powers  of  corporations  shall  enjoy 
the  rights,  franchises  and  privileges  possessed  by  each  of  the  corpora- 
tions so  consolidated,  subject  to  the  restrictions,  liabilities,  duties  and 
provisions  contained  in  this  chapter,  so  far  as  the  same  may  be  ap- 
plicable to  the  purposes  for  which  it  shall  have  been  organized  and 
expressed  in  the  agreement  for  consolidation,  and  may  prosecute  or 
carry  on  any  kind  of  business  which  each  of  the  consolidating  cor- 
porations was  Authorized  by  law  to  conduct. 

§  ii.  Transfer  of  property  of  old  corporations  to  consolidated 
corporations. — Upon  the  consummation  of  such  act  of  consolidation, 
all  the  rights,  privileges,  franchises  and  interests  of  each  of  the  cor- 
porations, parties  to  the  same,  and  all  the  property,  real,  personal 
and  mixed,  and  all  the  debts  due  on  whatever  account  to  either  of 
them,  as  well  as  all  stock  subscription  and  other  things  in  action  be- 
longing to  either  of  them,  shall  be  taken  and  deemed  to  be  transferred 
to  and  vested  in  such  new  corporation,  without  further  act  or  deed; 
and  all  claims,  demands,  property  and  every  other  interest  shall  be 
as  effectually'  the  property  of  the  new  corporation  as  they  were  of 
the  former  corporations,  parties  to  such  agreement  and  act;  and  the 
title  to  all  real  estate,  taken  by  deed  or  otherwise,  under  the  laws  of 
this  State,  vested  in  either  of  such  corporations,  parties  to  such  agree- 
ment and  act,  shall  not  be  deemed  to  revert  or  be  in  any  way  impaired 
by  reason  of  this  act,  or  anything  done  by  virtue  thereof,  but  shall 
be  vested  in  the  new  corporation  by  virtue  of  such  act  of  consolida- 
tion; and  all  the  rights,  privileges,  franchises  and  property  of  the 
corporations,  parties  to  any  consolidation  heretofore  made  under  this 
act,  shall  vest  as  fully  in  the  new  corporation  thereby  created  as  they 
were  vested  in  the  corporations,  parties  to  such  consolidations. 

§  12.  Rights  of  creditors  of  old  corporations. — The  rights  of 
creditors  of  any  corporation  that  shall  so  be  consolidated  shall  not 
in  any  manner  be  impaired,  nor  any  liability  or  obligation  for  the 
payment  of  any  money  due  or  to  become  due  to  any  person  or  per- 
sons, or  any  claim  or  demand  for  any  cause  existing  against  any  such 


§§  13-14]  THE  BUSINESS  CORPORATIONS  LAW.  299 

corporation  or  against  any  stockholder  thereof,  be  released  or  im- 
paired by  any  such  consolidation;  but  such  new  corporation  shall 
succeed  to  and  be  held  liable  to  pay  and  discharge  all  such  debts  and 
liabilities  of  each  of  the  corporations  consolidated  in  the  same  man- 
ner as  if  such  new  corporation  had  itself  incurred  the  obligation  or 
liabilitiy  to  pay  such  debt  or  damages,  and  the  stockholders  of  the 
respective  corporations  consolidated  shall  continue,  subject  to  all  the 
liabilities,  claims  and  demands  existing  against  them  as  such,  at  or 
before  the  consolidation;  and  no  action  or  proceeding  then  pending 
before  any  court  or  tribunal  in  which  any  corporation  that  may  be 
so  consolidated  is  a  party,  or  in  which  any  such  stockholder  is  a 
party,  shall  abate  or  be  discontinued  by  reason  of  such  consolidation, 
but  may  be  prosecuted  to  final  judgment,  as  though  no  consolidation 
had  been  entered  into;  or  such  new  corporation  may  be  substituted 
as  a  party  in  place  of  any  corporation  so  consolidated,  by  order  of 
the  court  in  which  such  action  or  proceeding  may  be  pending. 

§  13.  District  steam  corporations. — Any  corporation  now  or 
hereafter  incorporated  for  the  purpose  of  supplying  steam  to  con- 
sumers from  a  central  station  or  stations  through  pipes  laid  in  the 
public  streets,  shall  be  known  as  a  district  steam  corporation,  and 
upon  the  application  in  writing  of  the  owner  or  occupant  of  any 
building  or  premises,  within  one  hundred  feet  of  any  street  main 
laid  down  by  any  such  corporation,  and  payment  by  him  of  all  money 
due  from  him  to  it,  such  corporation  shall  supply  steam  as  may  be 
required  for  heating  such  building  or  premises,  notwithstanding  there 
may  be  rent  or  compensation  in  arrears  for  steam  supplied,  or  for 
meter,  pipe  or  fittings  furnished  to  a  former  occupant  thereof,  unless 
such  owner  or  occupant  shall  have  undertaken  or  agreed  with  the 
former  occupant  to  pay  or  to  exonerate  him  from  the  payment  of 
such  arrears,  and  shall  refuse  or  neglect  to  pay  the  same;  and  if,  for 
the  space  of  twenty  days  after  such  application,  and  the  deposit,  if 
required,  of  a  reasonable  sum  to  cover  the  cost  of  connection  and 
two  months'  steam  supply,  the  corporation  shall  refuse  or  neglect  to 
supply  steam  as  required,  it  shall  forfeit  to  such  applicant  the  sum 
of  ten  dollars  and  the  further  sum  of  five  dollars  for  every  day  there- 
after during  which  such  refusal  or  neglect  shall  continue;  but  no  such 
corporation  shall  be  required  to  lay  a  service  pipe  for  the  purpose 
of  supplying  steam  to  any  applicant  where  the  ground  in  which  such 
pipe  is  required  to  be  laid  shall  be  frozen,  or  otherwise  present  serious 
obstacles  to  laying  the  same,  nor  unless  the  applicant,  if  required, 
shall  deposit  in  advance  with  the  corporation  a  sum  of  money  suffi- 
cient to  pay  for  two  months'  steam  supply  and  the  cost  of  the  neces- 
sary connections  and  of  the  erection  of  a  meter  and  such  other  special 
apparatus  as  are  required  for  use  in  connection  with  such  steam  sup- 
ply, nor  unless  the  applicant  shall  provide  the  space  and  right  of  way 
necessary  for  the  erection,  maintenance  and  use  of  such  connections 
and  apparatus,  and  signify  his  assent  in  writing  to  the  reasonable 
regulations  of  the  corporation  with  reference  to  the  supply  of  steam 
to  consumers. 

§  14.  Examination  of  meters  by  agent  of  district  steam  corpora- 
tions.— Any  such  corporation  may  make  an  agreement  with  any  of 
its  customers,  by  which  any  of  its  officers  or  agents  shall  be  au- 
thorized at  all  reasonable  times  to  enter  any  dwelling,  store,  build- 
ing, room  or  place,  supplied  with  steam  by  such  corporation  and 
occupied  by  such  customer,  for  the  purpose  of  inspecting  and  examin- 


3OO  NEW   YORK    CORPORATIONS.  [§§  15-17 

ing  the  meters,  devices,  pipes,  fittings  and  appliances  for  supplying 
or  regulating  the  supply  of  steam,  and  for  ascertaining  the  quantity 
of  steam  consumed,  or  the  quantity  of  water  resulting  from  the  con- 
densation of  steam  consumed.  Every  such  agreement  shall  further 
provide  that  such  officer  or  agent  shall  exhibit  his  written  authority 
if  requested  by  the  occupant  of  such  dwelling,  store,  building,  room 
or  place.  Any  person  who  shall  directly  or  indirectly  prevent  or 
hinder  such  officer  or  agent  from  entering  such  dwelling,  store,  build- 
ing, room  or  place,  or  from  making  such  inspection  or  examination, 
in  violation  of  such  agreement,  shall  forfeit  to  the  corporation  the 
sum  of  twenty-five  dollars  for  each  offense. 

§15.  Entry  by  agent  of  district  steam  corporation  to  cut  off 
steam. — If  any  person  or  persons,  corporation  or  association  supplied 
with  steam  by  any  such  corporation,  shall  neglect  or  refuse  to  pay 
the  rent  or  remuneration  for  such  steam,  or  for  the  meter,  device, 
pipes,  fittings  or  appliances,  let  by  such  corporation  for  supplying 
steam,  or  for  ascertaining  the  quantity  of  steam  consumed,  or  the 
quantity  of  water  resulting  from  the  condensation  of  the  steam  con- 
sumed, agreed  upon  or  due  for  the  same,  as  required  by  his,  their  or 
its  contract  with  such  corporation,  the  latter  may  thereupon  stop  and 
prevent  the  steam  from  entering  the  premises  of  such  person,  persons, 
corporation  or  association,  so  neglecting  or  refusing  to  pay  such 
rent  or  remuneration,  and  may  also  in  any  case,  in  which  a  person 
is  liable  to  pay  a  forfeiture,  or  to  a  fine  or  imprisonment,  by  reason 
of  any  act  to  or  towards  such  corporation  or  its  property  for  which 
such  forfeiture,  fine  or  penalty  is  imposed  by  law,  stop  and  prevent 
the  steam  from  entering  the  premises  of  the  person  so  liable,  or  if  such 
person  be  an  officer  or  agent  of  any  corporation  or  association,  stop 
and  prevent  the  steam  from  entering  the  premises  of  such  corporation 
or  association.  In  all  cases  in  which  such  corporation  is  authorized 
to  stop  and  prevent  the  steam  from  entering  any  premises,  it  may, 
by  its  officers,  agents,  or  workmen,  enter  into  or  on  such  premises 
between  the  hours  of  eight  o'clock  in  the  forenoon  and  six  o'clock  in 
the  afternoon  and  cut  off,  disconnect,  separate  and  carry  away  any 
meter,  device,  pipe,  fitting  or  other  property  of  the  corporation;  and 
may  cut  off,  disconnect  and  separate  any  meter,  device,  pipe  or  fitting, 
whether  the  property  of  the  corporation  or  not,  from  the  mains  or 
pipes  of  such  corporation. 

§  16.  Water  Companies. — No  corporation  shall  be  formed  under 
this  chapter  for  the  purpose  of  accumulating,  storing,  conducting, 
furnishing  or  supplying  water  for  domestic,  manufacturing  or  munici- 
pal purposes  in  the  city  of  New  York. 

Any  corporation  formed  for  the  purpose  of  supplying  any  other 
city  of  the  State  with  water,  if  unable  to  agree  with  the  owners  of 
any  real  property  required  for  the  purpose  of  the  corporation  for  the 
purchase  thereof,  may  acquire  title  thereto  by  condemnation. 

§  17.    Condemnation  proceedings  by  certain  corporations. — Any 

corporation  formed  for  the  purpose  of  developing  or  improving  real 
property,  which  lays  out  for  public  use  roads,  streets,  avenues  or  high- 
ways, upon  or  through  its  lands,  if  unable  to  agree  with  the  owners  of 
any  real  property  required  for  the  purpose  of  extending,  continuing  or 
connecting  such  roads,  streets,  avenues  or  highways,  for  the  purchase 
thereof,  may  acquire  title  thereto  by  condemnation  in  the  manner 
prescribed  by  law;  provided  such  corporation  has  the  consents  of 


THE  BUSINESS  CORPORATIONS  LAW.  30! 

the  owners  of  not  less  than  one-half  of  all  of  the  land  which  adjoins  or 
abuts  upon>  or  which  will  adjoin  or  abut  upon,  such  roads,  streets, 
avenues  or  highways,  or  their  extensions,  continuations  or  connec- 
tions, when  completed;  and  such  corporation  may  lay  out  and  estab- 
lish such  roads,  streets,  avenues  or  highways,  and  the  extensions, 
continuations  or  connections  thereof,  and  may  construct  drains  or 
sewers,  and  such  bridges  or  culverts  as  may  be  necessary  to  maintain 
the  grades  of,  or  for  the  extension,  continuation  or  connection  of,  the 
roads,  streets,  avenues  or  highways,  so  laid  out;  and  may  connect 
such  roads,  streets,  avenues  or  highways,  with  or  across  roads,  streets, 
avenues  or  highways,  belonging  to  any  other  corporation  or  person, 
but  may  not  disturb  the  established  grades  thereof.  All  lands  so 
taken  by  condemnation  shall  be  deemed  to  be  acquired  for  a  public 
use. 


THE  STOCK  CORPORATION   LAW. 


Laws  of  1890,  Chapter  564,  as  Amended  to  January  ist,  1906. 

ARTICLE  I.     General  powers;  reorganization.      (§§   1-8.) 

2.  Directors  and  officers;  their  election,  duties  and  liabilities. 

(§§  20-34.) 

3.  Stock,  stockholders,  their  rights  and  liabilities.     (§§  40-62.) 


ARTICLE  I. 
GENERAL  POWERS;  REORGANIZATION. 


SECTION  i.     Short  title  and  application  of  chapter. 

2.  Power  to  borrow  money  -and  mortgage  property. 

3.  Reorganization  upon  s.ale  of  corporate  property  and  fran- 

chises. 

4.  Contents  of  plan  or  agreement. 

5.  Sale  of  property;  possession  of  receiver  and  suits  against 

him. 

6.  Municipalities  may  assent  to  plan  of  readjustment. 

7.  Combinations  prohibited. 

8.  Mortgage;  effect  of  recitals  therein;  actions  thereon. 

§  i.  Short  title  and  application  of  chapter. — This  chapter  shall 
be  known  as  the  stock  corporation  law,  but  article  one  shall  not  ap- 
ply to  moneyed  corporations. 

§  2.  Power  to  borrow  money  and  mortgage  property. — In  addi- 
tion to  the  powers  conferred  by  the  general  corporation  law,  every 
stock  corporation  shall  have  the  power  to  borrow  money  and  con- 
tract debts,  when  necessary  for  the  transaction  of  its  business,  or  for 
the  exercise  of  its  corporate  rights,  privileges  or  franchises,  or  for 
any  other  lawful  purpose  of  its  incorporation;  and  it  may  issue  and 
dispose  of  its  obligations  for  any  amount  so  borrowed,  and  may 
mortgage  its  property  and  franchises  to  secure  the  payment  of  such 
obligations,  or  of  any  debt  contracted  for  said  purposes.  Every  such 

302 


§  3]  THE  STOCK   CORPORATION   LAW.  303 

mortgage,  except  purchase  money  mortgages  and  mortgages  author- 
ized by  contracts  made  prior  to  May  first,  eighteen  hundred  and 
ninety-one,  shall  be  consented  to  by  the  holders  of  not  less  than  two- 
thirds  of  the  capital  stock  of  the  corporation,  which  consent  shall  be 
given  either  in  writing  or  by  vote  at  a  special  meeting  of  the  stock- 
holders called  for  that  purpose,  upon  the  same  notice  as  that  required 
for  the  annual  meetings  of  the  corporation;  and  a  certificate  under  the 
seal  of  the  corporation  that  such  consent  was  given  by  the  stock- 
holders in  writing,  or  that  it  was  given  by  vote  at  a  meeting  as  afore- 
said, shall  be  subscribed  and  acknowledged  by  the  president  or  a  vice- 
president  and  by  the  secretary  or  an  assistant  secretary,  of  the  cor- 
poration, and  shall  be  filed  and  recorded  in  the  office  of  the  clerk  or 
register  of  the  county  wherein  the  corporation  has  its  principal  place 
of  business.  When  authorized  by  like  consent,  the  directors  under 
such  regulations  as  they  may  adopt,  may  confer  on  the  holder  of  any 
debt  or  obligation,  whether  secured  or  unsecured,  evidenced  by  bonds 
of  the  corporation,  the  right  to  convert  the  principal  thereof,  after 
two  and  not  more  than  twelve  years  from  the  date  of  such  bonds,  into 
stock  of  the  corporation;  and  if  the  capital  stock  shall  not  be  suffi- 
cient to  meet  the  conversion  when  made,  the  directors  shall,  from 
time  to  time,  authorize  an  increase  of  capital  stock  sufficient  for  that 
purpose  by  causing  to  be  filed  in  the  office  of  the  Secretary  of  State, 
and  a  duplicate  thereof  in  the  office  of  the  clerk  of  the  county  where 
the  principal  place  of  business  of  the  corporation  shall  be  located,  a 
certificate  under  the  seal  of  the  corporation,  subscribed  and  acknowl- 
edged by  the  president  and  secretary  of  the  corporation  setting  forth: 

1.  A  copy  of  such  mortgage;  or  resolution  of  directors  authoriz- 
ing the  issue  of  such  bonds. 

2.  That  the  holders   of  not  less   than  two-thirds  of  the   capital 
stock   of   the   corporation    duly   consented    to   the    execution    of   such 
mortgage    or    resolution    of   directors    authorizing   the    issue    of    such 
bonds  by  such  corporation. 

3.  A  copy  of  the  resolution  of  the  directors  of  the  corporation 
authorizing  the  increase  of  the  capital  stock  of  the  corporation  neces- 
sary for  the  purpose  of  such  conversion. 

4.  The  amount  of  capital  theretofore  authorized,  the  proportion 
thereof    actually    issued    and    the    amount    of    the    increased    capital 
stock. 

If  the  corporation  be  a  railroad  corporation  the  certificate  shall 
have  endorsed  thereon  the  approval  of  the  board  of  railroad  commis- 
sioners. When  the  certificate  herein  provided  for  has  been  filed,  the 
capital  stock  of  such  corporation  shall  be  increased  to  the  amount 
specified  in  such  certificate. 

§  3.  Reorganization  upon  sale  of  corporate  property  and  fran- 
chises.— When  the  property  and  franchises  of  any  domestic  stock  cor- 
poration shall  be  sold  by  virtue  of  a  mortgage  or  deed  of  trust,  duly 
executed  by  it,  or  pursuant  to  the  judgment  or  decree  of  a  court  of 
competent  jurisdiction,  or  by  virtue  of  any  execution  issued  thereon, 
and  the  purchaser,  his  assignee  or  grantee  shall  have  acquired  title 
to  the  same  in  the  manner  prescribed  by  law,  he  may  associate  with 
him  any  number  of  persons,  not  less  than  the  number  required  by 
law  for  an  incorporation  for  similar  purposes,  at  least  two-thirds  of 
whom  shall  be  citizens  of  the  United  States  and  one  shall  be  a  resi- 
dent of  this  State,  and  they  may  become  a  corporation  and  take  and 
possess  the  property  and  franchises  thus  sold,  and  which  were  at  the 


304  NEW   YORK   CORPORATIONS.  [  §  4 

time  of  the  sale  possessed  by  the  corporation  whose  property  shall 
have  been  so  sold,  upon  making  and  acknowledging  and  filing  in  the 
offices  where  certificates  of  incorporation  are  required  by  law  to  be 
filed,  a  certificate  in  which  they  shall  describe  by  name  and  reference 
to  the  law  under  which  it  was  organized,  the  corporation  whose  prop- 
erty and  franchises  they  have  acquired,  and  the  court  by  whose  au- 
thority the  sale  had  been  made,  with  the  date  of  the  judgment  or  de- 
cree authorizing  or  directing  the  same,  and  a  brief  description  of  the 
property  sold,  and  also  the  following  particulars: 

1.  The  name  of  the  new  corporation  intended  to  be  formed  by 
the  filing  of  such  certificate;  and  the  place  where  its  principal  office  is 
to  be  located. 

2.  The  maximum  amount  of  its  capital  stock  and  the  number  of 
shares  into  which  it  is  to  be  divided,  specifying  the  classes  thereof, 
whether  common   or  preferred,  and  the  amount  of,  and   rights  per- 
taining to,  each  class. 

3.  The  number  of  directors,  not  less  nor  more  than  the  number 
required  by  law  for  the  old  corporation,  who  shall  manage  the  affairs 
of   the   new   corporation,   and    the   names   and   post-office   address   of 
the  directors  for  the  first  year. 

They  may  insert  in  such  certificate  any  provisions  relating  to 
the  new  corporation,  or  its  management,  contained  in  any  plan  or 
agreement  which  may  have  been  entered  into  as  provided  in  section 
four  of  this  chapter.  Such  corporation  shall  be  vested  with,  and 
be  entitled  to  exercise  and  enjoy,  all  the  rights,  privileges  and  fran- 
chises, which  at  the  time  of  such  sale  belonged  to,  of  were  vested  in 
the  corporation,  last  owning  the  property  sold,  or  its  receiver,  and 
shall  be  subject  to  all  the  provisions,  duties  and  liabilities  imposed 
by  law  on  such  corporation.  Any  proceedings  heretofore  taken  in 
substantial  compliance  with  this  section  as  hereby  amended  and  any 
and  all  incorporations  based  thereon  are  hereby  ratified  and  con- 
firmed. 

§  4.  Contents  of  plan  or  agreement. — At  or  previous  to  the  sale 
the  purchasers  thereat,  or  the  person  for  whom  the  purchase  is  to 
be  made,  may  enter  into  a  plan  or  agreement,  for  or  in  anticipation 
of  the  readjustment  of  the  respective  interests  therein  of  any  credi- 
tors, mortgagees  and  stockholders,  or  any  of  them,  of  the  corpora- 
tion owning  such  property  and  franchises  at  the  time  of  sale,  and 
for  the  representation  of  such  interests  in  the  bonds  or  stock  of  the 
new  corporation  to  be  formed,  and  may  therein  regulate  voting  by 
the  holders  of  the  preferred  and  common  stock  at  any  meeting  of 
the  stockholders,  and  may  provide  for,  and  regulate  voting  by  the 
holders,  and  owners  of  any  or  all  of  the  bonds  of  the  corporation, 
foreclosed,  or  of  the  bonds  issued  or  to  be  issued  by  the  new  cor- 
poration; and  such  right  of  .voting  by  bondholders  shall  be  exercised 
in  such  manner,  for  such  period,  and  upon  such  conditions,  as  shall 
be  therein  described.  Such  plan  or  agreement  must  not  be  inconsis- 
tent with  the  laws  of  the  State  and  shall  be  binding  upon  the  corpora- 
tion, until  changed  as  therein  provided,  or  as  otherwise  provided  by 
law.  The  new  corporation  when  duly  organized,  pursuant  to  such 
plan  or  agreement  and  to  the  provisions  of  law,  may  issue  its  bonds 
and  stock  in  conformity  with  the  provisions  of  such  plan  or  agree- 
ment, and  may  at  any  time  within  six  months  after  its  organization, 
compromise,  settle  or  assume  the  payment  of  any  debt,  claim  or 
liability  of  the  former  corporation  upon  such  terms  as  may  be  law- 


§§  5'8]  THE  STOCK   CORPORATION   LAW.  305 

fully  approved  by  a  majority  of  the  agents  or  trustees  intrusted  with 
the  carrying  out  of  the  plan  or  agreement  of  reorganization,  and 
may  establish  preferences  in  favor  of  any  portion  of  its  capital  stock 
and  may  divide  its  stock  into  classes;  but  the  capital  stock  of  the  new 
corporation  shall  not  exceed,  in  the  aggregate,  the  maximum  amount 
of  stock  mentioned  in  the  certificate  of  incorporation. 

§  5.  Sale  of  property;  possession  of  receiver  and  suits  against 
him. — The  Supreme  Court  may  direct  a  sale  of  the  whole  of  the 
property,  rights  and  franchises  covered  by  the  mortgage  or  mort- 
gages, or  deeds  of  trust  foreclosed  at  any  one  time  and  place  to  be 
named  in  the  judgment  or  order,  either  in  case  of  the  non-payment 
of  interest  only,  or  of  both  the  principal  and  interest  due  and  un- 
paid and  secured  by  any  such  mortgage  or  mortgages  or  deeds  of 
trust.  Neither  the  sale  nor  the  formation  of  the  new  corporation 
shall  interfere  with  the  authority  or  possession  of  any  receiver  of 
such  property  and  franchises,  but  he  shall  remain  liable  to  be  re- 
moved or  discharged  at  such  time  as  the  court  may  deem  proper. 
No  suit  or  proceeding  shall  be  commenced  against  such  receiver  un- 
less founded  on  willful  misconduct  or  fraud  in  his  trust  after  the  ex- 
piration of  sixty  days  from  the  time  of  his  discharge;  but  after  the 
expiration  of  sixty  days  the  new  corporation  shall  be  liable  in  any 
action  that  may  be  commenced  against  it,  and  founded  on  any  act  or 
omission  of  such  receiver  for  which  he  may  not  be  sued,  and  to  the 
same  extent  as  the  receiver,  but  for  this  section  would  be  or  remain 
liable,  or  to  the  same  extent  that  the  new  corporation  would  be  had 
it  done  or  omitted  the  acts  complained  of. 

§  6.     Municipalities   may   assent   to   plan   of   readjustment. — The 

commissioners,  corporate  authorities  or  proper  officers  of  any  city, 
town  or  village,  who  may  hold  stock  in  any  corporation,  the  property 
and  franchises  whereof  shall  be  liable  to  be  sold,  may  assent  to  any 
plan  or  agreement  of  reorganization  which  lawfully  provides  for  the 
formation  of  a  new  corporation,  and  the  issue  of  stock  therein  to  the 
proper  authorities  or  officers  of  such  cities,  towns  or  villages  in  ex- 
change for  the  stock  of  the  old  or  former  corporation  by  them 
respectively  held.  And  such  commissioners,  corporate  authorities  or 
other  proper  officers  may  assign,  transfer  or  surrender  the  stock  so 
held  by  them  in  the  manner  required  by  such  plan,  and  accept  in  lieu 
thereof  the  stock  issued  by  such  new  corporation  in  conformity 
therewith. 

§  7.  Combinations  abolished. — No  domestic  stock  corporation 
and  no  foreign  corporation  doing  business  in  this  State  shall  com- 
bine with  any  other  corporation  or  person  for  the  creation  of  a 
monopoly  or  the  unlawful  restraint  of  trade  or  for  the  prevention 
of  competition  in  any  necessary  of  life. 

§  8.  Mortgage;  effect  of  recitals  therein.— Whenever  any  mort- 
gage affecting  property  or  franchises  within  this  State  heretofore  or 
hereafter  executed  by  authority  of  the  board  of  directors  in  behalf  of 
any  stock  corporation,  domestic  or  foreign,  of  any  description,  recites 
or  represents  in  substance  or  effect  that  the  execution  of  such  mort- 
gage has  been  duly  consented  to,  or  authorized  by  stockholders,  such 
recital  or  representation  in  any  such  mortgage,  after  public  record 
thereof  within  this  State,  shall  be  presumptive  evidence  that  the  exe- 


306  NEW   YORK    CORPORATIONS. 

cution  of  such  mortgage  has  been  duly  and  sufficiently  consented  to, 
and  authorized  by  stockholders  as  required  by  any  provision  of  law. 
After  any  such  mortgage  heretofore  or  hereafter  shall  have  been 
publicly  recorded  for  more  than  one  year  in  one  or  more  of  the  coun- 
ties of  this  State  containing  the  mortgaged  premises  or  any  part 
thereof,  and  the  corporation  shall  have  received  value  for  bonds 
actually  issued  under  and  secured  by  such  mortgage,  and  interest 
shall  have  been  paid  on  any  of  such  bonds  according  to  the  terms 
thereof,  such  recital  or  representation  of  such  mortgage  so  recorded 
shall  be  conclusive  evidence  that  the  execution  of  such  mortgage 
has  been  duly  and  sufficiently  consented  to,  and  authorized  by  stock- 
holders as  required  by  any  provision  of  law,  and  its  validity  shall 
not  be  impaired  by  reason  of  any  defect  or  insufficiency  of  consent 
or  authority  of  stockholders  or  in  filing  or  recording  such  consent 
or  authority,  and  such  mortgage  shall  be  valid  and  binding  upon  the 
corporation,  and  those  claiming  under  it,  as  security  for  all  valid 
bonds  issued  or  to  be  issued  thereunder,  unless  such  mortgage  shall 
be  adjudged  invalid  in  an  action  begun  as  hereinafter,  in  this  section, 
provided.  Notwithstanding  the  foregoing  provisions  of  this  section, 
the  invalidity  of  any  such  mortgage  heretofore  recorded  because  of  in- 
sufficiency of  consent  by  stockholders  may  be  adjudged  in  any  action 
for  such  purpose  begun  before  the  first  day  of  April,  nineteen  hundred 
and  two,  and  the  invalidity  of  any  such  mortgage  hereafter  recorded, 
because  of  insufficiency  of  consent  by  stockholders,  may  be  adjudged 
in  any  action  for  such  purpose  begun,  within  one  year  after  the  ear- 
liest record  of  such  mortgage  in  any  county  in  this  State,  provided 
in  either  case  that  such  action  shall  have  been  so  begun  by  or  in 
behalf  of  the  corporation  by  direction  of  the  board  of  directors  acting 
in  their  own  discretion,  or  upon  the  written  request  of  the  holders  of 
not  less  than  one-third  of  the  capital  stock  of  the  corporation;  and 
in  any  such  action  so  begun  by  or  in  behalf  of  the  corporation,  the 
recitals  or  representations  of  the  mortgage  shall  be  presumptive  evi- 
dence only  as  first  above  provided.  Whenever  hereafter,  in  com- 
pliance with'  any  law  of  this  State,  the  officers  of  any  corporation 
shall  have  made  and  filed  and  recorded  a  certificate  that  the  execution 
of  a  mortgage  hereafter  made  by  the  corporation  has  been  duly  con- 
sented to  by  stockholders,  such  certificate  shall  be  conclusive  evi- 
dence as  to  the  truth  thereof,  in  favor  of  any  and  all  persons  who 
in  good  faith  shall  receive  or  purchase,  for  value,  any  bond  or  obli- 
gation purporting  to  be  secured  by  such  mortgage,  at  any  time  when 
said  certificate  shall  remain  of  record  and  uncancelled.  Nothing  in 
this  section  contained  shall  affect  any  right  or  any  remedy  in  respect 
of  any  such  right  of  any  creditor  accrued  before  this  enactment  nor 
shall  it  dispense  with  the  necessity  of  obtaining  the  consent  of  the 
board  of  railroad  commissioners  to  any  mortgage  by  a  railroad  cor- 
poration. 


§§  2O-2I]  THE  STOCK  CORPORATION  LAW.  307 

ARTICLE  II. 

DIRECTORS   AND    OFFICERS;   THEIR   ELECTION,   DUTIES 
AND  LIABILITIES. 

SECTION  20.  Directors. 

21.  Change  of  number  of  directors. 

22.  When  acts  of  directors  void. 

23.  Liability  of  directors  for  making  unauthorized  dividends. 

24.  (Repealed.) 

25.  Liability  of  directors  for  loans  to  stockholders. 

26.  Transfers  of  stock  by  stockholders  indebted  to  corpora- 

tion. 

27.  Officers. 

28.  Inspectors  and  their  oath. 

29.  Books  to  be  kept. 

30.  Annual  report  to  Secretary  of  State. 

31.  Liability  of  officers  for  false  certificates,  reports  or  pub- 

lic notices. 

32.  Alteration  or  extension  of  business. 

33.  Sale  of  franchise  and  property. 

34.  Liabilities  of  directors  and  officers  defined. 

§  20.  Directors. — The  directors  of  every  stock  corporation  shall 
be  chosen  at  the  time  and  place  fixed  by  the  by-laws  of  the  corpora- 
tion by  a  plurality  of  the  votes  at  such  election.  Each  director  shall 
be  a  stockholder  unless  otherwise  provided  in  the  certificate,  or  in 
a  by-law  adopted  by  a  stockholders'  meeting.  Vacancies  in  the  board 
of  directors  shall  be  filled  in  the  manner  prescribed  in  the  by-laws. 
Notice  of  the  time  and  place  of  holding  any  election  of  directors  shall 
be  given  by  publication  thereof,  at  least  once  in  each  week  for  two 
successive  weeks  immediately  preceding  such  election,  in  a  news- 
paper published  in  the  county  where  such  election  is  to  be  held,  and 
in  such  other  manner  as  may  be  prescribed  in  the  by-laws.  Policy 
holders  of  an  insurance  corporation  shall  be  eligible  to  election  as 
directors.  At  least  one-fourth  in  number  of  the  directors  of  every 
stock  corporation  shall  be  elected  annually. 

§  21  Change  of  number  of  directors.— The  number  of  directors 
of  any  stock  corporation  may  be  increased  or  reduced,  but  not  below 
the  minimum  number  prescribed  by  law,  when  the  stockholders 
owning  a  majority  of  the  stock  of  the  corporation  shall  so  determine, 
at  a  meeting  to  be  held  at  the  usual  place  of  meeting  of  the  directors, 
on  two  weeks'  notice  in  writing  to  each  stockholder  of  record.  Such 
notice  shall  be  served  personally  or  by  mail,  directed  to  each  stock- 
holder at  his  last  known  post-office  address.  Proof  of  the  service 
of  such  notice  shall  be  filed  in  the  office  of  the  corporation  at  or  be- 
fore the  time  of  such  meeting.  The  proceedings  of  such  meeting 
shall  be  entered  in  the  minutes  of  the  corporation  and  a  transcript 
thereof,  verified  by  the  president  and  secretary  of  the  meeting  shall 
be  filed  in  the  offices  where  the  original  certificates  of  incorporation 
were  filed.  Such  increase  or  reduction  may  also  be  effected  by  unani- 
mous consent  without  a  meeting,  in  which  case  there  shall  be  filed  in 
the  offices  herein  specified  the  unanimous  consent  of  the  stock- 
holders in  writing,  signed  by  them,  or  their  duly  authorized  proxies, 
but  no  such  consent  shall  be  valid  unless  there  is  annexed,  thereto 
an  affidavit  of  the  custodian  of  the  stock  book  of  such  corporation 


308  NEW   YORK   CORPORATIONS.  [§§22-25 

stating  that  the  persons  who  have  signed  such  consent,  either  in  per- 
son or  by  proxy,  are  the  holders  of  record  of  the  entire  capital  stock 
of  said  corporation  issued  and  outstanding.  If  a  corporation  formed 
under  or  subject  to  the  banking  law,  the  consent  of  the  superintend- 
ent of  banks,  and  if  an  insurance  corporation,  the  consent  of  the 
superintendent  of  insurance,  shall  be  first  obtained  to  such  increase 
or  reduction  of  the  number  of  directors.  This  section  shall  apply 
to  any  stock  corporation  whether  organized  under  a  general  or 
special  law,  and  the  number  of  directors  may  be  increased  as  hereby 
provided  notwithstanding  the  maximum  number  of  directors  now 
prescribed  by  law.  If  the  number  of  directors  be  increased,  the  addi- 
tional directors  authorized  by  such  increase  shall  be  elected  by  the 
votes  of  a  majority  of  the  directors  in  office  at  the  time  of  the  in- 
crease. If  the  original  or  an  amended  certificate  of  incorporation 
of  the  corporation  shall  provide  that  the  directors  shall  be  divided 
into  two  or  more  classes,  whose  terms  of  office  shall  respectively  ex- 
pire at  different  times,  the  additional  directors  shall  be  divided  among 
such  classes  as  nearly  as  practicable  in  proportion  to  the  respective 
numbers  of  directors  constituting  each  class  prior  to  such  increase. 

§  22.  When  acts  of  directors  void. — When  the  directors  of  any 
corporation  for  the  first  year  of  its  corporate  existence  shall  hold 
over  and  continue  to  be  directors  after  the  first  year,  because  of  their 
neglect  or  refusal  to  adopt  the  by-laws  required  to  enable  the  stock- 
holders to  hold  the  annual  election  for  directors,  all  their  acts  and 
proceedings  while  so  holding  over,  done  for  and  in  the  name  of  the 
corporation,  designed  to  charge  upon  it  any  liability  or  obligation 
for  the  services  of  any  such  director,  or  any  officer,  or  attorney  or 
counsel  appointed  by  them,  and  every  such  liability  or  obligation 
shall  be  held  to  be  fraudulent  and  void. 

§  23.     Liability  of  directors  for  making  unauthorized  dividends. 

— The  directors  of  a  stock  corporation  shall  not  make  dividends,  ex- 
cept from  the  surplus  profits  arising  from  the  business  of  such  cor- 
poration, nor  divide,  withdraw  or  in  any  way  pay  to  the  stockholders 
or  any  of  them,  any  part  of  the  capital  of  such  corporation,  or  reduce 
its  capital  stock,  except  as  authorized  by  law.  In  case  of  any  viola- 
tion of  the  provisions  of  this  section,  the  directors  under  whose  ad- 
ministration the  same  may  have  happened,  except  those  who  may 
have  caused  their  dissent  therefrom  to  be  entered  at  large  upon  the 
minutes  of  such  directors  at  the  time,  or  were  not  present  when  the 
same  happened,  shall  jointly  and  severally  be  liable  to  such  corpora- 
tion and  to  the  creditors  thereof  to  the  full  amount  of  any  loss  sus- 
tained by  such  corporation  or  its  creditors  respectively  by  reason  of 
such  withdrawal,  division  or  reduction.  But  this  section  shall  not 
prevent  a  division  and  distribution  of  the  assets  of  any  such  cor- 
poration remaining  after  the  payment  of  all  its  debts  and  liabilities 
upon  the  dissolution  of  such  corporation  or  the  expiration  of  its 
charter;  nor  shall  it  prevent  a  corporation  from  accepting  shares  of 
its  capital  stock  in  complete  or  partial  settlement  of  a  debt  owing 
to  the  corporation,  which  by  the  board  of  directors  shall  be  deemed 
to  be  bad  or  doubtful. 

§  24.     (Repealed.) 

§  25.  Liability  of  directors  for  loans  to  stockholders. — No  loan 
of  moneys  shall  be  made  by  any  stock  corporation,  except  a  monied 


§§  26-29]  THE  STOCK   CORPORATION  LAW.  309 

corporation,  or  by  any  officer  thereof  out  of  its  funds  to  any  stock- 
holder therein,  nor  shall  any  such  corporation  or  officer  discount  any 
note  or  other  evidence  of  debt,  or  receive  the  same  in  payment  of 
any  instalment  or  any  part  thereof  due  or  to  become  due  on  any  stock 
in  such  corporation,  or  receive  or  discount  any  note,  or  other  evi- 
dence of  debt,  to  enable  any  stockholder  to  withdraw  any  part  of 
the  money  paid  in  by  him  on  his  stock.  In  case  of  the  violation  of 
any  provision  of  this  section,  the  officers  or  directors  making  such 
loan,  or  assenting  thereto,  or  receiving  or  discounting  such  notes  or 
other  evidences  of  debt,  shall,  jointly  and  severally,  be  personally 
liable  to  the  extent  of  such  loan  and  interest,  for  all  the  debts  of  the 
corporation  contracted  before  the  repayment  of  the  sum  loaned,  and 
to  the  full  amount  of  the  notes  or  other  evidences  of  debt  so  received 
or  discounted,  with  interest  from  the  time  such  liability  accrued. 

§  26.  Transfers  of  stock  by  stockholder  indebted  to  corpora- 
tion.— If  a  stockholder  shall  be  indebted  to  the  corporation,  the  direc- 
tors may  refuse  to  consent  to  a  transfer  of  his  stock  until  such  in- 
debtedness is  paid,  provided  a  copy  of  this  section  is  written  or 
printed  upon  the  certificate  of  stock. 

§  27.  Officers. — The  directors  of  a  stock  corporation  may  ap- 
point from  their  number  a  president,  and  may  appoint  a  secretary, 
treasurer,  and  other  officers,  agents  and  employees,  who  shall  respec- 
tively have  such  powers  and  perform  such  duties  in  the  management 
of  the  property  and  affairs  of  the  corporation,  subject  to  the  control 
of  the  directors,  as  may  be  prescribed  by  them  or  in  the  by-laws. 
The  directors  may  require  any  such  officer,  agent  or  employee  to 
give  security  for  the  faithful  performance  of  his  duties,  and  may  re- 
move him  at  pleasure.  The  policy  holders  of  an  insurance  corpora- 
tion shall  be  eligible  to  election  or  appointment  as  its  officers. 

§  28.  Inspectors  and  their  oath. — The  inspectors  of  election  of 
every  stock  corporation  shall  be  appointed  in  the  manner  prescribed 
in  the  by-laws,  but  the  inspectors  of  the  first  election  of  directors 
and  of  all  previous  meetings  of  the  stockholders  shall  be  appointed 
by  the  board  of  directors  named  in  the  certificate  of  incorporation. 
No  director  or  officer  of  a  monied  corporation  shall  be  eligible  to 
election  or  appointment  as  inspector.  Each  inspector  shall  be  en- 
titled to  a  reasonable  compensation  for  his  services,  to  be  paid  by 
the  corporation,  and  if  any  inspector  shall  refuse  to  serve,  or  neglect 
to  attend  at  the  election,  or  his  office  become  vacant,  the  meeting 
may  appoint  an  inspector  in  his  place  unless  the  by-laws  otherwise 
provide.  The  inspectors  appointed  to  act  at  any  meeting  of  the  stock- 
holders shall,  before  entering  upon  the  discharge  of  their  duties,  be 
sworn  to  faithfully  execute  the  duties  of  inspector  at  such  meeting 
with  strict  impartiality,  and  according  to  the  best  of  their  ability,  and 
the  oath  so  taken  shall  be  subscribed  by  them,  and  immediately  filed 
in  the  office  of  the  clerk  of  the  county  in  which  such  election  or  meet- 
ing shall  be  held,  with  a  certificate  of  the  result  of  the  vote  taken 
thereat. 

§  29.  Books  to  be  kept. — Every  stock  corporation  shall  keep  at 
its  office,  correct  books  of  account  of  all  its  business  and  transactions, 
and  a  book  to  be  known  as  the  stock  book,  containing  the  names, 
alphabetically  arranged,  of  all  persons  who  are  stockholders  of  the 
corporation,  showing  their  places  of  residence,  the  number  of  shares 


3IO  NEW  YORK   CORPORATIONS.  [§§  30-31 

of  stock  held  by  them  respectively,  the  time  when  they  respectively 
became  the  owners  thereof,  and  the  amount  paid  thereon.  The  stock 
book  of  every  such  corporation  shall  be  open  daily,  during  at  least 
three  business  hours  for  the  inspection  of  its  stockholders  and  judg- 
ment creditors,  who  may  make  extracts  therefrom.  No  transfer  of 
stock  shall  be  valid  as  against  the  corporation,  its  stockholders  and 
creditors  for  any  purpose,  except  to  render  the  transferee  liable  for 
the  debts  of  the  corporation  to  the  extent  provided  for  in  this  chap- 
ter, until  it  shall  have  been  entered  in  such  book  as  required  by 
this  section,  by  an  entry  showing  from  and  to  whom  transferred. 
The  stock  book  of  every  such  corporation  and  the  books  of  account 
of  every  bank  shall  be  presumptive  evidence  of  the  facts  therein  so 
stated  in  favor  of  the  plaintiff,  in  any  action  or  proceeding  against 
such  corporation  or  any  of  its  officers,  directors  or  stockholders. 
Every  corporation  that  shall  neglect  or  refuse  to  keep  or  cause  to 
be  kept  such  books,  or  to  keep  any  book  open  for  inspection  as 
herein  required,  shall  forfeit  to  the  people  the  sum  of  fifty  dollars 
for  every  day  it  shall  so  neglect  or  refuse.  If  any  officer  or  agent  of 
any  such  corporation  shall  willfully  neglect  or  refuse  to  make  any 
proper  entry  in  such  book  or  books,  or  shall  neglect  or  refuse  to 
exhibit  the  same,  or  to  allow  them  to  be  inspected  and  extracts  taken 
therefrom  as  provided  in  this  section,  the  corporation  and  such 
officer  or  agent  shall  each  forfeit  and  pay  to  the  party  injured  a 
penalty  of  fifty  dollars  for  every  such  neglect  or  refusal,  and  all 
damages  resulting  to  him  therefrom. 

§  30.  Annual  report  to  Secretary  of  State. — Every  domestic  stock 
corporation  and  every  foreign  stock  corporation  doing  business  within 
this  State,  except  moneyed  and  railroad  corporations,  shall,  annually, 
during  the  month  of  January,  or,  if  doing  business  without  the  United 
States,  before  the  first  day  of  May,  may  make  a  report  as  of  the  first 
day  of  January,  which  will  state: 

1.  The  amount  of  its  capital  stock,  and  the  proportion  actually 
issued. 

2.  The   amount   of  its   debts   or   an   amount   which   they   do  not 
exceed. 

3.  The  amount  of  its  assets  or  an   amount  which  its   assets  at 
least  equal. 

4.  The  names  and  addresses  of  all  the  directors  and  officers  of 
the  company  and  in  the  case  of  a  foreign  corporation,  the  name  also 
of  the  person   designated  in  the  manner  prescribed   by  the   Code  of 
Civil   Procedure,   as   a  person   upon   whom   process   against   the   cor- 
poration may  be  served  within  this  State. 

Such  report  shall  be  made  by  the  president  or  a  vice-president 
or  the  treasurer  or  a  secretary  of  the  corporation  and  shall  be  filed 
in  the  office  of  the  Secretary  of  State.  If  such  report  be  not  so 
made  and  filed,  any  such  officer  who  shall  thereafter  neglect  or 
refuse  to  make  and  to  file  such  report,  within  ten  days  after  written 
request  so  to  do  shall  have  been  made  by  a  creditor  or  by  a  stock- 
holder of  the  corporation,  shall  forfeit  to  the  people  the  sum  of  fifty 
dollars  for  every  day  he  shall  so  neglect  or  refuse. 

§  31.  Liability  of  officers  for  false  certificates,  reports  or  public 
notices. — If  any  certificate  or  report  made  or  public  notice  given  by 
the  officers  or  directors  of  a  stock  corporation  shall  be  false  in  any 
material  representation,  the  officers  and  directors  signing  the  same 


§§  32~33l  THE  STOCK   CORPORATION   LAW.  3!  I 

shall  jointly  and  severally  be  personally  liable  to  any  person  who 
has  become  a  creditor  or  stockholder  of  the  corporation  upon  the 
faith  of  any  such  certificate,  report,  notice  or  any  material  represen- 
tation therein  to  the  amount  of  the  debt  contracted  upon  the  faith 
thereof  if  not  paid  when  due,  or  of  the  damages  sustained  by  any 
purchaser  of  or  subscriber  to  its  stock  upon  the  faith  thereof.  The 
liability  imposed  by  this  section  shall  exist  in  all  cases  where  the 
contents  of  any  such  certificate,  report  or  notice  or  of  any  material 
representation  therein  shall  have  been  communicated  either  directly 
or  indirectly  to  the  person  so  becoming  a  creditor  or  stockholder 
and  he  became  such  creditor  or  stockholder  upon  the  faith  thereof. 
No  action  can  be  maintained  for  a  cause  of  action  created  by  this 
section  unless  brought  within  two  years  from  the  time  the  certificate, 
report  or  public  notice  shall  have  been  made  or  given  by  the  officers 
or  directors  of  such  corporation. 

§  32.  Alterations  or  extension  of  business. — Any  stock  corpora- 
tion heretofore  or  hereafter  organized  under  any  general  or  special 
law  of  this  State  may  alter  its  certificate  of  incorporation  so  as  to 
include  therein  any  purposes,  powers  or  provisions  which  at  the  time 
of  such  alteration  may  apply  to  corporations  engaged  in  a  business 
of  the  same  general  character,  or  which  might  be  included  in  the 
certificate  of  incorporation  of  a  corporation  organized  under  any 
general  law  of  this  State  for  a  business  of  the  same  general  char- 
acter, by  filing  in  the  manner  provided  for  the  original  certificate 
of  incorporation  an  amended  certificate,  executed  by  the  president 
and  secretary,  stating  the  alteration  proposed,  and  that  the  same  has 
been  duly  authorized  by  a  vote  of  a  majority  of  the  directors  and 
also  by  vote  of  stockholders  representing  at  least  three-fifths  of  the 
capital  stock,  at  a  meeting  of  the  stockholders  called  for  the  pur- 
pose in  the  manner  provided  in  section  forty-five  of  this  chapter, 
and  a  copy  of  the  proceedings  of  such  meeting,  verified  by  the  affi- 
davit of  one  of  the  directors  present  thereat,  shall  be  filed  with 
such  amended  certificate. 

§  33.  Sale  of  franchise  and  property. — A  stock  corporation,  ex- 
cept a  railroad  corporation  and  except  as  otherwise  provided  by  law, 
with  the  consent  of  two-thirds  of  its  stock,  may  sell  and  convey  its 
property,  rights,  privileges  and  franchises,  or  any  interest  therein  or 
any  part  thereof  to  a  domestic  corporation,  engaged  in  a  business  of 
the  same  general  character,  or  which  might  be  included  in  the  cer- 
tificate of  incorporation  of  a  corporation  organizing  under  any  gen- 
eral law  of  this  State  for  a  business  of  the  same  general  character, 
and  a  domestic  corporation  the  principal  business  of  which  is  car- 
ried on  in,  and  the  principal  tangible  property  of  which  is  located 
within  a  state  adjoining  the  State  of  New  York,  may  with  the  con- 
sent of  the  holders  of  ninety-five  per  centum  of  its  capital  stock, 
sell  and  convey  its  property  situate  without  the  State  of  New  York, 
not  including  its  franchises,  to  a  corporation  organized  under  the 
laws  of  such  adjoining  state,  and  such  sale  and  conveyance  shall,  in 
case  of  a  sale  to  a  domestic  corporation,  vest  the  rights,  property 
and  franchises  thereby  transferred,  and  in  case  of  a  sale  to  a  foreign 
corporation  the  property  sold  in  the  corporation  to  which  they  are 
conveyed  for  the  term  of  its  corporate  existence,  subject  to  the  pro- 
visions and  restrictions  applicable  to  the  corporation  conveying  them. 
Before  such  sale  or  conveyance  shall  be  made  such  consent  shall 
be  obtained  at  a  meeting  of  the  stockholders  called  upon  like  notice 


312  NEW  YORK  CORPORATIONS.  [§34 

as  that  required  for  an  annual  meeting.  If  any  stockholder  not  vot- 
ing in  favor  of  such  proposed  sale  or  conveyance  shall  at  such 
meeting,  or  within  twenty  days  thereafter  object  to  such  sale,  and 
demand  payment  for  his  stock,  he  may,  within  sixty  days  after  such 
meeting,  apply  to  the  Supreme  Court  at  any  special  term  thereof 
held  in  the  district  in.  which  the  principal  place  of  business  of  such 
corporation  is  situated,  upon  eight  days'  notice  to  the  corporation, 
for  the  appointment  of  three  persons  to  appraise  the  value  of  such 
stock,  and  the  court  shall  appoint  three  such  appraisers,  and  desig- 
nate the  time  and  place  of  their  proceedings  as  shall  be  deemed 
proper,  and  also  direct  the  manner  in  which  payment  for  such  stock 
shall  be  made  to  such  stockholders.  The  court  may  fill  any  vacancy 
in  the  board  of  appraisers  occurring  by  refusal  or  neglect  to  serve 
or  otherwise.  The  appraisers  shall  meet  at  the  time  and  place  desig- 
nated, and  they  or  any  two  of  them,  after  being  duly  sworn  honestly 
and  faithfully  to  discharge  their  duties,  shall  estimate  and  certify  the 
value  of  such  stock  at  the  time  of  such  dissent,  and  deliver  one  copy 
to  such  corporation,  and  another  to  such  stockholder,  if  demanded; 
the  charges  and  expenses  of  the  appraisers  shall  be  paid  by  the  cor- 
poration. When  the  corporation  shall  have  paid  the  amount  of  such 
appraisal,  as  directed  by  the  court,  such  stockholders  shall  cease  to 
have  any  interest  in  such  stock  and  in  the  corporate  property  of  such 
corporation  and  such  stock  may  be  held  or  disposed  of  by  such  cor- 
poration. 

§  34.  Liabilities  of  directors  and  officers  defined. — No  director  or 
officer  of  any  stock  corporation  shall  be  liable  to  any  creditor  of  the 
corporation,  because  of  the  creation  of  any  excessive  indebtedness,  or 
because  of  any  failure  to  make  or  to  file  an  annual  report,  whether 
heretofore  or  hereafter  occurring: 

(1)  In  case  of  any  debt,  as  to  which  personal  liability  of  direc- 
tors or  officers  may  be  or  shall  have  been  waived  by  such  creditor, 
or  by  anyone  under  whom  he  claims;  or  by  any  provision  of  any  in- 
strument creating  or  securing  such  debt;  or 

(2)  Unless  within   three  years   after  the   occurrence   of  the  act 
or  the  default  in  respect  of  which  it  shall  be  sought  to  charge  the 
director  or  officer,  such  creditor  shall  have  served  upon  such  direc- 
tor or  officer  written  notice  of  his  intention  to  hold  him  personally 
liable  for  his   claim;   provided,   nevertheless,   that   any   such   liability, 
because  of  any  such  default  now  existing  and  not  waived  as  above 
provided,  may  be  enforced  by  action  begun  at  any  time  within  the 
year  eighteen  hundred  and  ninety-nine  or  by  action  begun  thereafter, 
if  within  such  year  written  notice  of  intention  to  enforce  such  liability 
shall  have  been  given  as  above  provided. 

Any  director  or  officer,  who,  because  of  any  such  existing  or 
future  liability,  shall  pay  any  debt  of  the  corporation,  shall  be  sub- 
rogated  to  all  rights  of  the  creditor  in  respect  thereof  against  the 
corporate  property,  but  not  against  the  stockholders  of  the  corpora- 
tion; and  also  shall  be  entitled  to  contribution  from  all  other  direc- 
tors and  officers  of  the  corporation  similarly  liable  for  the  same 
debt,  and  the  personal  representatives  of  any  such  director  or  officer 
who  shall  have  died  before  making  such  contribution. 


§  40]  THE  STOCK  CORPORATION   LAW.  313 

ARTICLE  III. 

STOCK;  STOCKHOLDERS,  THEIR  RIGHTS  AND 
LIABILITIES. 

SECTION  40.  Issue  and  transfers  of  stock. 

41.  Subscriptions  to  stock. 

42.  Consideration  for  issue  of  stock  and  bonds. 

43.  Time  of  payment  of  subscriptions  to  stock. 

44.  Increase   or   reduction    of   capital    stock. 

45.  Notice  of  meeting  to  increase  or  reduce  capital  stock. 

46.  Conduct  of  such  meeting;  certificate  of  increase  or  re- 

duction. 

47.  Preferred  and  common  stock. 

48.  Prohibited   transfers  to   officers  or  stockholders. 

49.  (Repealed.) 

50.  Application  to  court  to  order  issue  of  new  in  place  of 

lost  certificate  of  stock. 

51.  Order  of  court  upon  such  application. 

52.  Financial  statement  to  stockholders. 

53.  Stock   books   of   foreign    corporations. 

54.  Liabilities  of  stockholders. 

55.  Limitation   of    stockholder's    liability. 

56.  Increase  or  reduction  of  number  of  shares. 

57.  Voluntary   dissolution. 

58.  Merger. 

59.  Change  of  place  of  business. 

60.  Liabilities  of  officers,  directors  and  stockholders  of  for- 

eign corporations. 

61.  Dissolution  by  incorporators. 

62.  Partly  paid  stock. 

§  40.  Issue  and  transfers  of  stock. — The  stock  of  every  stock 
corporation  shall  be  represented  by  certificates  prepared  by  the  direc- 
tors and  signed  by  the  president  or  vice-president  and  secretary  or 
treasurer  and  sealed  with  the  seal  of  the  corporation,  and  shall  be 
transferable  in  the  manner  prescribed  in  this  chapter  and  in  the  by- 
laws. No  share  shall  be  transferable  until  all  previous  calls  thereon 
shall  have  been  fully  paid  in. 

Any  stock  corporation,  domestic  or  foreign,  now  existing  or  here- 
after organized,  except  monied  corporations,  may  purchase,  acquire, 
hold  and  dispose  of  the  stocks,  bonds  and  other  evidences  of  indebt- 
edness of  any  corporation,  domestic  or  foreign,  and  issue  in  exchange 
therefor  its  stock,  bonds  or  other  obligations  if  authorized  so  to  do 
by  a  provision  in  the  certificate  of  incorporation  of  such  stock  cor- 
poration, or  in  any  certificate  amendatory  thereof  or  supplementary 
thereto,  filed  in  pursuance  of  law,  or  if  the  corporation  whose  stock 
is  so  purchased,  acquired,  held  or  disposed  of,  is  engaged  in  a  busi- 
ness similar  to  that  of  such  stock  corporation,  or  engaged  in  the 
manufacture,  use  or  sale  of  the  property,  or  in  the  construction  or 
operation  of  works  necessary  or  useful  in  the  business  of  such  stock 
corporation,  or  in  which  or  in  connection  with  which  the  manu- 
factured articles,  product  or  property  of  such  stock  corporation  are 
or  may  be  used,  or  is  a  corporation  with  which  such  stock  corpora- 
tion is  or  may  be  authorized  to  consolidate.  When  any  such  cor- 


314  NEW   YORK   CORPORATIONS.  [§§41-43 

poration  shall  be  a  stockholder  in  any  other  corporation,  as  herein 
provided,  its  president  or  other  officers  shall  be  eligible  to  the  office 
of  director  of  such  corporation,  the  same  as  if  they  were  individually 
stockholders  therein  and  the  corporation  holding  such  stock  shall 
possess  and  exercise  in  respect  thereof,  all  the  rights,  powers  and 
privileges  of  individual  owners  or  holders  of  such  stock. 

Any  stock  corporation  may,  in  pursuance  of  a  unanimous  vote 
of  its  stockholders  voting  at  a  special  meeting  called  for  that  pur- 
pose by  notice  in  writing  signed  by  a  majority  of  the  directors  of  such 
corporation  stating  the  time  and  place  and  object  of  the  meeting,  and 
served  upon  each  stockholder  appearing  as  such  upon  the  books  of 
the  corporation,  personally  or  by  mail  at  his  last  known  post-office 
address  at  least  sixty  days  prior  to  such  meeting,  guarantee  the  bonds 
of  any  other  domestic  corporation  engaged  in  the  same  general  line 
of  business;  and  any  stock  corporation  owning  the  entire  capital 
stock  of  any  other  domestic  stock  corporation  engaged  in  the  same 
general  line  of  business  may  in  pursuance  of  a  two-thirds  vote  of 
its  stockholders  voting  at  a  special  meeting  called  for  that  purpose 
by  notice  in  writing  signed  by  a  majority  of  the  directors  of  such 
corporation,  stating  the  time  and  place  and  object  of  the  meeting 
and  served  upon  each  stockholder  appearing  as  such  upon  the  books 
of  the  corporation  perspnally,  or  by  mail,  at  his  last-known  post-office, 
at  least  sixty  days  prior  to  such  meeting,  guarantee  the  bonds  of 
such  other  corporation. 

§  41.  Subscriptions  to  stock. — If  the  whole  capital  stock  shall 
not  have  been  subscribed  at  the  time  of  filing  the  certificate  of  in- 
corporation, the  directors  named  in  the  certificate  may  open  books 
of  subscription  to  fill  up  the  capital  stock  in  such  places,  and  after 
giving  such  notices  as  they  may  deem  expedient,  and  may  continue 
to  receive  subscriptions  until  the  whole  capital  stock  is  subscribed. 
At  the  time  of  subscribing,  every  subscriber,  whose  subscription  is 
payable  in  money,  shall  pay  to  the  directors  ten  per  centum  upon  the 
amount  subscribed  by  him  in  cash,  and  no  such  subscription  shall  be 
received  or  taken  without  such  payment. 

§  42.  Consideration  for  issue  of  stock  and  bonds. — No  corpora- 
tion shall  issue  either  stock  or  bonds  except  for  money,  labor  done 
or  property  actually  received  for  the  use  and  lawful  purposes  of  such 
corporation.  Any  corporation  may  purchase  any  property  authorized 
by  its  certificate  of  incorporation,  or  necessary  for  the  use  and  lawful 
purposes  of  such  corporation,  and  may  issue  stock  to  the  amount 
of  the  value  thereof  in  payment  therefor,  and  the  stock  so  issued 
shall  be  full  paid  stock  and  not  liable  to  any  further  call,  neither  shall 
the  holder  thereof  be  liable  for  any  further  payment  under  any  of 
the  provisions  of  this  act;  and  in  the  absence  of  fraud  in  the  transac- 
tion the  judgment  of  the  directors  as  to  the  value  of  the  property 
purchased  shall  be  conclusive;  and  in  all  statements  and  reports  of 
the  corporation,  by  law  required  to  be  published  or  filed,  this  stock 
shall  not  be  stated  or  reported  as  being  issued  for  cash  paid  to  the 
corporation,  but  shall  be  reported  as  issued  for  property  purchased. 

§  43.  Time  of  payment  of  subscriptions  to  stock. — Subscriptions 
to  the  capital  stock  of  a  corporation  shall  be  paid  at  such  times  and 
in  such  instalments  as  the  board  of  directors  may  by  resolution  re- 
quire. If  default  shall  be  made  in  the  payment  of  any  instalment  as 


§§  44~45l  THE  STOCK   CORPORATION   LAW.  315 

required  by  such  resolution,  the  board  may  declare  the  stock  and 
all  previous  payments  thereon  forfeited  for  the  use  of  the  corporation, 
after  the  expiration  of  sixty  days  from  the  service  on  the  defaulting 
stockholder,  personally  or  by  mail  directed  to  him  at  his  last-known 
post-office  address,  of  a  written  notice  requiring  him  to  make  pay- 
ment within  sixty  days  from  the  service  of  the  notice  at  a  place 
specified  therein,  and  stating  that,  in  case  of  failure  to  do  so,  his 
stock  and  all  previous  payments  thereon  will  be  forfeited  for  the 
use  of  the  corporation. 

Such  stock,  if  forfeited,  may  be  reissued  or  subscriptions  there- 
for may  be  received  as  in  the  case  of  stock  not  issued  or  subscribed 
for.  If  not  sold  for  its  par  value  or  subscribed  for  within  six  months 
after  such  forfeiture,  it  shall  be  canceled  and  deducted  from  the 
amount  of  the  capital  stock.  If  by  such  cancellation,  the  amount  of 
the  capital  stock  is  reduced  below  the  minimum  required  by  law, 
the  capital  stock  shall  be  increased  to  the  required  amount  within 
three  months  thereafter  or  an  action  may  be  brought  or  proceed- 
ings instituted  to  close  up  the  business  of  the  corporation  as  in  the 
case  of  an  insolvent  corporation.  If  a  receiver  of  the  assets  of  the 
corporation  has  been  appointed,  all  unpaid  subscriptions  to  the  stock 
shall  be  paid  at  such  times  and  in  such  instalments  as  the  receiver 
or  the  court  may  direct. 

§  44.  Increase  or  reduction  of  capital  stock. — Any  domestic  cor- 
poration may  increase  or  reduce  its  capital  stock  in  the  manner  herein 
provided,  but  not  above  the  maximum  or  below  the  minimum,  if  any, 
prescribed  by  general  law  governing  corporations  formed  for  similar 
purposes.  If  increased,  the  holders  of  the  additional  stock  issued 
shall  be  subject  to  the  same  liabilities  with  respect  thereto  as  are 
provided  by  law  in  relation  to  the  original  capital;  if  reduced,  the 
amount  of  its  debts  and  liabilities  shall  not  exceed  the  amount  of  its 
reduced  capital,  unless  an  insurance  corporation,  in  which  case  the 
amount  of  its  debts  and  liabilities  shall  not  exceed  the  amount  of  its 
reduced  capital  and  other  assets.  The  owner  of  any  stock  shall  not 
be  relieved  from  any  liability  existing  prior  to  the  reduction  of  the 
capital  stock  of  any  stock  corporation.  If  a  banking  corporation, 
whether  the  capital  be  increased  or  reduced,  its  assets  shall  at  least 
be  equal  to  its  debts  and  liabilities  and  the  capital  stock,  as  in- 
creased or  reduced.  A  domestic  railroad  corporation  may  increase 
or  reduce  its  capital  stock  in  the  manner  herein  provided,  notwith- 
standing any  provision  contained  herein,  or  in  any  general  or  special 
law  fixing  or  limiting  the  amount  of  capital  stock  which  may  be 
issued  by  it. 

§  45.  Notice  of  meeting  to  increase  or  reduce  capital  stock. — 
Every  such  increase  or  reduction  must  be  authorized  either  by  the 
unanimous  consent  of  the  stockholders,  expressed  in  writing  and 
filed  in  the  office  of  the  Secretary  of  State  and  in  the  office  of  the 
clerk  of  the  county  in  which  the  principal  business  office  of  the 
corporation  is  located,  or  by  a  vote  of  the  stockholders  owning  at 
least  a  majority  of  the  stock  of  the  corporation,  taken  at  a  meet- 
ing of  the  stockholders  specially  called  for  that  purpose  in  the  man- 
ner provided  by  law  or  by  the  by-laws.  Notice  of  the  meeting, 
stating  the  time,  place  and  object,  and  the  amount  of  the  increase 
or  reduction  proposed,  signed  by  the  president  or  a  vice-president 
and  the  secretary,  shall  be  published  once  a  week,  for  at  least  two 


316  NEW   YORK   CORPORATIONS.  [§§46-47 

successive  weeks,  in  a  newspaper  in  the  county  where  its  principal 
business  office  is  located,  if  any  is  published  therein,  and  a  copy  of 
such  notice  shall  be  duly  mailed  to  each  stockholder  or  member 
at  his  last  known  post-office  address  at  least  two  weeks  before  the 
meeting  or  shall  be  personally  served  on  him  at  least  five  days  before 
the  meeting. 

§  46.  Conduct  of  such  meeting;  certificate  of  increase  or  reduc- 
tion.— If,  at  the  time  and  place  specified  in  the  notice,  the  stock- 
holders shall  appear  in  person  or  by  proxy  in  numbers  represent- 
ing at  least  a  majority  of  all  the  shares  of  stock,  they  shall  or- 
ganize by  choosing  from  their  number  a  chairman  and  secretary, 
and  take  a  vote  of  those  present  in  person  or  by  proxy,  and  if  a 
sufficient  number  of  votes  shall  be  given  in  favor  of  such  increase 
or  reduction,  or  if  the  same  shall  have  been  authorized  by  the 
unanimous  consent  of  stockholders  expressed  in  writing  signed  by 
them  or  their  duly  authorized  proxies,  a  certificate  of  the  proceeding 
showing  a  compliance  with  the  provisions  of  this  chapter,  the 
amount  of  capital  theretofore  authorized,  and  the  proportion  thereof 
actually  issued,  and  the  amount  of  the  increased  or  reduced  capital 
stock,  and  in  case  of  the  reduction  of  capital  stock  the  whole  amount 
of  the  ascertained  debts  and  liabilities  of  the  corporation  shall  be 
made,  signed,  verified  and  acknowledged  by  the  chairman  and  secre- 
tary of  the  meeting,  and  filed  in  the  office  of  the  clerk  of  the  county 
where  its  principal  place  of  business  shall  be  located,  and  a  duplicate 
thereof  in  the  office  of  the  Secretary  of  State.  In  case  of  a  reduc- 
tion of  the  capital  stock,  except  of  a  railroad  corporation  or  a 
moneyed  corporation,  such  certificate  or  consent  hereinafter  pro- 
vided for  shall  have  indorsed  thereon  the  approval  of  the  comptroller, 
to  the  effect  that  the  reduced  capital  is  sufficient  for  the  proper  pur- 
poses of  the  corporation,  and  is  in  excess  of  its  ascertained  debts 
and  liabilities;  and  in  case  of  the  increase  or  reduction  of  the  capital 
stock  of  a  railroad  corporation  or  a  moneyed  corporation,  the  cer- 
tificate or  the  unanimous  consent  of  stockholders  as  the  case  may  be, 
shall  have  indorsed  thereon  the  approval  of  the  board  of  railroad 
commissioners,  if  a  railroad  corporation;  of  the  superintendent  of 
banks,  if  a  corporation  formed  under  or  subject  to  the  banking  law, 
and  of  the  superintendent  of  insurance,  if  an  insurance  corporation. 
When  the  certificate  herein  provided  for,  or  the  unanimous  consent 
of  stockholders  in  writing,  signed  by  them  or  their  duly  authorized 
proxies,  approved  as  aforesaid  has  been  filed,  the  capital  stock  of 
such  corporation  shall  be  increased  or  reduced,  as  the  case  may  be, 
to  the  amount  specified  in  such  certificate  or  consent.  The  proceed- 
ings of  the  meeting  at  which  such  increase  or  reduction  is  voted,  or, 
if  such  increase  or  reduction  shall  have  been  authorized  by  unani- 
mous consent  without  a  meeting,  then  a  copy  of  such  consent  shall 
be  entered  upon  the  minutes  of  the  corporation.  If  the  capital  stock 
is  reduced,  the  amount  of  capital  over  and  above  the  amount  of  the 
reduced  capital  shall,  if  the  meeting  or  consents  so  determine  or  pro- 
vide, be  returned  to  the  stockholders  pro  rata,  at  such  times  and 
in  such  manner  as  the  directors  shall  determine,  except  in  the  case 
of  the  reduction  of  the  capital  stock  of  an  insurance  corporation,  as 
an  alternative  to  make  good  an  existing  impairment. 

§  47.  Preferred  and  common  stock. — Every  domestic  stock  cor- 
poration may  issue  preferred  stock  and  common  stock  and  different 
classes  of  preferred  stock,  if  the  certificate  of  incorporation  so  pro- 


§  48]  THE  STOCK   CORPORATION   LAW.  317 

vides,  or  by  the  consent  of  the  holders  of  record  of  two-thirds  of 
the  capital  stock,  given  at  a  meeting  called  for  that  purpose  upon 
notice  such  as  is  required  for  the  annual  meeting  of  the  corpora- 
tion. A  certificate  of  the  proceedings  of  such  meeting,  signed  and 
sworn  to  by  the  president  or  a  vice-president,  and  by  the  secretary 
or  assistant  secretary,  of  the  corporation,  shall  be  filed  and  recorded 
in  the  offices  where  the  original  certificate  of  incorporation  of  such 
corporation  was  filed  and  recorded;  and  the  corporation  may,  upon 
the  written  request  of  the  holders  of  any  preferred  stock,  by  a  two- 
thirds  vote  of  its  directors,  exchange  the  same  for  common  stock, 
and  issue  certificates  for  common  stock  therefor,  upon  such  valua- 
tion as  may  have  been  agreed  upon  in  the  certificate  of  organization 
of  such  corporation,  or  the  issue  of  such  preferred  stock,  or  share 
for  share  but  the  total  amount  of  such  capital  stock  shall  not  be 
increased  thereby. 

§  48.  Prohibited  transfers  to  officers  or  stockholders. — No  cor- 
poration which  shall  have  refused  to  pay  any  of  its  notes  or  other 
obligations  when  due,  in  lawful  money  of  the  United  States,  nor  any 
of  its  officers  or  directors,  shall  transfer  any  of  its  property  to  any 
of  its  officers,  directors  or  stockholders,  directly  or  indirectly,  for  the 
payment  of  any  debt,  or  upon  any  other  consideration  than  the  full 
value  of  the  property  paid  in  cash.  No  conveyance,  assignment  or 
transfer  of  any  property  of  any  such  corporation  by  it  or  by  any 
officer,  director  or  stockholder  thereof,  nor  any  payment  made, 
judgment  suffered,  lien  created  or  security  given  by  it  or  by  any 
officer,  director  or  stockholder  when  the  corporation  is  insolvent  or 
its  insolvency  is  imminent,  with  the  intent  of  giving  a  preference  to 
any  particular  creditor  over  other  creditors  of  the  corporation  shall 
be  valid,  except  that  laborers'  wages  for  services  shall  be  preferred 
claims  and  be  entitled  to  payment  before  any  other  creditors  out  of 
the  corporation  assets  in  excess  of  valid  prior  liens  or  incumbrances. 
No  corporation  formed  under  or  subject  to  the  banking,  insurance 
or  railroad  law  shall  make  any  assignment  in  contemplation  of  in- 
solvency. Every  person  receiving  by  means  of  any  such  prohibited 
act  or  deed  any  property  of  the  corporation  shall  be  bound  to  account 
therefor  to  its  creditors  or  stockholders  or  other  trustees.  No  stock- 
holder of  any  such  corporation  shall  make  any  transfer  or  assignment 
of  his  stock  therein  to  any  person  in  contemplation  of  its  insolvency. 
Every  transfer  or  assignment  or  other  act  done  in  violation  of  the 
foregoing  provisions  of  this  section  shall  be  void.  No  conveyance, 
assignment  or  transfer  of  any  property  of  a  corporation  formed  un- 
der or  subject  to  the  banking  law,  exceeding  in  value  one  thousand 
dollars,  shall  be  made  by  such  corporation,  or  by  any  officer  or 
director  thereof,  unless  authorized  by  previous  resolution  of  its 
board  of  directors,  except  promissory  notes  or  other  evidences  of 
debt  issued  or  received  by  the  officers  of  the  corporation  in  the 
transaction  of  its  ordinary  business  and  except  payments  in  specie 
or  other  current  money  or  in  bank  bills  made  by  such  officers.  No 
such  conveyance,  assignment  or  transfer  shall  be  void  in  the  hands 
of  a  purchaser  for  a  valuable  consideration  without  notice.  Every 
director  or  officer  of  a  corporation  who  shall  violate  or  be  con- 
cerned in  violating  any  provisions  of  this  section,  shall  be  personally 
liable  to  the  creditors  and  stockholders  of  the  corporation  of  which 
he  shall  be  director  or  an  officer  to  the  full  extent  of  any  loss  they 
may  respectively  sustain'  by  such  violation. 


318  NEW   YORK   CORPORATIONS.  [§§  50-51 

§  50.  Application  to  court  to  order  issue  of  new  in  place  of  lost 
certificate  of  stock. — The  owner  of  a  lost  or  destroyed  certificate  of 
stock,  if  the  corporation  shall  refuse  to  issue  a  new  certificate  in 
place  thereof,  may  apply  to  the  Supreme  Court,  at  any  special  term 
held  in  the  district  where  he  resides,  or  in  which  the  principal  busi- 
ness office  of  the  corporation  is  located,  for  an  order  requiring  the 
corporation  to  show  cause  why  it  should  not  be  required  to  issue  a 
new  certificate  in  place  of  the  one  lost  or  destroyed.  The  applica- 
tion shall  be  by  petition,  duly  verified  by  the  owner,  stating  the 
name  of  the  corporation,  the  number  and  date  of  the  certificate,  if 
known,  or  if  it  can  be  ascertained  by  the  petitioner;  the  number  of 
shares  named  therein,  to  whom  issued,  and  as  particular  a  statement 
of  the  circumstances  attending  such  loss  or  destruction  as  the  peti- 
tioner can  give.  Upon  the  presentation  of  the  petition  the  court 
shall  make  an  order  requiring  the  corporation  to  show  cause,  at  a 
time  and  place  therein  mentioned,  why  it  should  not  issue  a  new 
certificate  of  stock  in  place  of  the  one  described  in  the  petition.  A 
copy  of  the  petition  and  order  shall  be  served  on  the  president  or 
other  head  of  the  corporation,  or  on  the  secretary  or  treasurer 
thereof,  personally,  at  least  ten  days  before  the  time  for  showing 
cause. 

§  51.  Order  of  court  upon  such  application. — Upon  the  return 
of  the  order,  with  proof  of  due  service  thereof,  the  court  shall,  in  a 
summary  manner,  and  in  such  mode  as  it  may  deem  advisable,  in- 
quire into  the  truth  of  the  facts  stated  in  the  petition,  and  hear  the 
proofs  and  allegations  of  the  parties  in  regard  thereto,  and  if  satis- 
fied that  the  petitioner  is  the  lawful  owner  of  the  number  of  shares, 
or  any  part  thereof,  described  in  the  petition,  and  that  the  certifi- 
cate therefor  has  been  lost  or  destroyed,  and  can  not  after  due  dili- 
gence be  found,  and  that  no  sufficient  cause  has  been  shown  why 
a  new  certificate  should  not  be  issued,  it  shall  make  an  order  requir- 
ing the  corporation,  within  such  time  as  shall  be  therein  designated, 
to  issue  and  deliver  to  the  petitioner  a  new  certificate  for  the  num- 
ber of  shares  specified  in  the  order,  upon  depositing  such  security, 
or  filing  a  bond  in  such  form  and  with  such  sureties  as  to  the  court 
shall  appear  sufficient  to  indemnify  any  person  other  than  the  peti- 
tioner who  shall  thereafter  be  found  to  be  the  lawful  owner  of  the 
certificate  lost  or  destroyed;  but  such  provision  requiring  security 
to  be  deposited  or  bond  filed  is  to  be  construed  as  excluding  an  ap- 
plication made  by  a  domestic  municipal  corporation  or  by  a  public 
officer  in  behalf  of  such  corporation;  and  the  court  may  direct  the 
publication  of  such  notice,  either  before  or  after  making  such  order 
as  it  shall  deem  proper.  Any  person  claiming  any  rights  under  the 
certificates  alleged  to  have  been  lost  or  destroyed  shall  have  recourse 
to  such  indemnity.  But  in  any  application  under  the  provisions  of  this 
act  in  which  a  domestic  municipal  corporation  or  a  public  officer  in 
behalf  of  such  corporation,  shall  be  by  the  foregoing  provisions  of 
this  section,  excused  from  depositing  security  or  filing  a  bond,  such 
municipal  corporation  shall  be  liable  for  all  damages  that  may  be 
sustained  by  any  person,  in  the  same  case  and  to  the  same  extent  as 
sureties  to  a  bond  or  undertaking  would  have  been,  if  such  a  bond 
or  undertaking  had  been  filed;  and  the  corporation  issuing  such  cer- 
tificate, shall  be  discharged  from  all  liability  to  such  person  upon 
compliance  with  such  order;  and  obedience  to  the  order  may  be 
enforced  by  attachment  against  the  officer  or  officers  of  the  corpora- 
tion on  proof  of  his  or  their  refusal  to  comply  with  it. 


§§  52-54]  THE  STOCK   CORPORATION   LAW.  319 

§  52.  Financial  statement  to  stockholders. — Stockholders  own- 
ing five  per  centum  of  the  capital  stock  of  any  corporation  other 
than  a  monied  corporation,  not  exceeding  one  hundred  thousand  dol- 
lars, or  three  per  centum  where  it  exceeds  one  hundred  thousand 
dollars,  may  make  a  written  request  to  the  treasurer  or  chief  fiscal 
officer  thereof,  for  a  statement  of  its  affairs,  under  oath,  embracing 
a  particular  account  of  all  its  assets  and  liabilities,  and  the  treasurer 
shall  make  such  statement  and  deliver  it  to  the  person  presenting 
the  request  within  thirty  days  thereafter,  and  keep  on  file  for  twelve 
months  thereafter  a  copy  of  such  statement,  which  shall  at  all  times 
during  business  hours  be  exhibited  to  any  stockholder  demanding 
an  examination  thereof;  but  the  treasurer  or  such  chief  fiscal  officer 
shall  not  be  required  to  deliver  more  than  one  such  statement  in  any 
one  year.  The  Supreme  Court,  or  any  justice  thereof,  may  upon 
application,  for  good  cause  shown,  extend  the  time  for  making  and 
delivering  such  certificate.  For  every  neglect  or  refusal  of  the  treas- 
urer or  other  chief  fiscal  officer  thereof  to  comply  with  the  provisions 
of  this  section  he  shall  forfeit  and  pay  to  the  person  making  such 
request  the  sum  of  fifty  dollars,  and  the  further  sum  of  ten  dollars 
for  every  twenty-four  hours  thereafter  until  such  statement  shall  be 
furnished. 

§  53.  Stock  books  of  foreign  corporations. — Every  foreign  stock 
corporation  having  an  office  for  the  transaction  of  business  in  this 
State,  except  moneyed  and  railroad  corporations,  shall  keep  therein 
a  book  to  be  known  as  a  stock  book,  containing  the  names,  alpha- 
betically arranged,  of  all  persons  who  are  stockholders  of  the  cor- 
poration, showing  their  places  of  residence,  the  number  of  shares  of 
stock  held  by  them  respectively,  the  time  when  they  respectively 
became  the  owners  thereof,  and  the  amount  paid  thereon.  Such  stock 
book  shall  be  open  daily,  during  business  hours,  for  the  inspection 
of  its  stockholders  and  judgment  creditors,  and  any  officer  of  the 
State  authorized  by  law  to  investigate  the  affairs  of  any  such  cor- 
poration. If  any  such  foreign  stock  corporation  has  in  this  State  a 
transfer  agent,  whether  such  agent  shall  be  a  corporation  or  a  natural 
person,  such  stock  book  may  be  deposited  in  the  office  of  such 
agent  and  shall  be  open  to  inspection  at  all  times  during  the  usual 
hours  of  transacting  business,  to  any  stockholder,  judgment  creditor 
or  officer  of  the  State  authorized  by  law  to  investigate  the  affairs  of 
such  corporation.  For  any  refusal  to  allow  such  book  to  be  in- 
spected, such  corporation  and  the  officer  or  agent  so  refusing  shall 
each  forfeit  the  sum  of  two  hundred  and  fifty  dollars  to  be  recovered 
by  the  person  to  whom  such  refusal  was  made. 

§  54.  Liabilities  of  stockholders. — Every  holder  of  capital  stock 
not  fully  paid,  in  any  stock  corporation,  shall  be  personally  liable 
to  its  creditors,  to  an  amount  equal  to  the  amount  unpaid  on  the 
stock  held  by  him  for  debts  of  the  corporation  contracted  while  such 
stock  was  held  by  him.  As  to  existing  corporations  the  liability  im- 
posed by  this  section  shall  be  in  lieu  of  the  liability  imposed  upon 
stockholders  of  any  existing  corporation,  under  any  general  or  special 
law  (excepting  laws  relating  to  moneyed  corporations,  and  corpora- 
tions and  associations  for  banking  purposes),  on  account  of  any  in- 
debtedness hereafter  contracted  or  any  stock  hereafter  issued;  but 
nothing  in  this  section  contained  shall  create  or  increase  any  liability 
of  stockholders  of  any  existing  corporation  under  any  general  or 
special  law.  The  stockholders  of  every  stock  corporation  shall  jointly 


32O  NEW  YORK   CORPORATIONS.  [§§  55-57 

and  severally  be  personally  liable  for  all  debts  due  and  owing  to  any 
of  its  laborers,  servants  or  employees  other  than  contractors,  for 
services  performed  by  them  for  such  corporation.  Before  such 
laborer,  servant  or  employee  shall  charge  such  stockholder  for  such 
services,  he  shall  give  him  notice  in  writing,  within  thirty  days  after 
the  termination  of  such  services,  that  he  intends  to  hold  him  liable, 
and  shall  commence  an  action  therefor  within  thirty  days  after  the 
return  of  an  execution  unsatisfied  against  the  corporation  upon  a 
judgment  recovered  against  it  for  services.  No  person  holding  stock 
in  any  corporation  as  collateral  security,  or  as  executor,  adminis- 
trator, guardian  or  trustee,  unless  he  shall  have  voluntarily  invested 
the  trust  funds  in  such  stock,  shall  be  personally  subject  to  liability 
as  a  stockholder;  but  the  person  pledging  such  stock  shall  be  con- 
sidered the  holder  thereof  and  shall  be  liable  as  stockholder,  and 
the  estates  and  funds  in  the  hands  of  such  executor,  administrator, 
guardian  or  trustee  shall  be  liable  in  the  like  manner  and  to  the 
same  extent  as  the  testator  or  intestate,  or  the  ward  or  person  in- 
terested in  such  trust  fund  would  have  been,  if  he  had  been  living 
and  competent  to  act  and  held  the  same  stock  in  his  own  name, 
unless  it  appears  that  such  executor,  administrator,  guardian  or  trus- 
tee voluntarily  invested  the  trust  funds  in  such  stocks,  in  which  case 
he  shall  be  personally  liable  as  a  stockholder. 

§  55.  Limitation  of  stockholder's  liability. — No  action  shall  be 
brought  against  a  stockholder  for  any  debt  of  the  corporation  until 
judgment  therefor  has  been  recovered  against  the  corporation,  and 
an  execution  thereon  has  been  returned  unsatisfied  in  whole  or  in 
part,  and  the  amount  due  on  such  execution  shall  be  the  amount 
recoverable,  with  costs  against  the  stockholder.  No  stockholder  shall 
be  personally  liable  for  any  debt  of  the  corporation  not  payable 
within  two  years  from  the  time  it  is  contracted,  nor  unless  an  action 
for  its  collection  shall  be  brought  against  the  corporation  within  two 
years  after  the  debt  becomes  due;  and  no  action  shall  be  brought 
against  a  stockholder  after  he  shall  have  ceased  to  be  a  stockholder, 
for  any  debt  of  the  corporation,  unless  brought  within  two  years 
from  the  time  he  shall  have  ceased  to  be  a  stockholder. 

§  56.  Increase  or  reduction  of  number  of  shares. — The  number 
of  shares  into  which  the  capital  stock  of  any  stock  corporation  is  di- 
vided may  be  increased  or  reduced  by  a  two-thirds  vote  of  all  stock 
duly  represented  at  a  meeting  held  and  conducted  in  like  manner, 
and  upon  filing  a  like  certificate,  as  required  for  the  increase  or  re- 
duction of  its  capital  stock.  If  such  increase  or  reduction  of  the  num- 
ber of  .shares  be  so  authorized,  the  corporation  shall  issue  to  each 
stockholder  certificates  for  as  many  shares  of  the  new  stock  as  equal 
in  par  value  the  shares  of  the  old  stock  held  by  him,  upon  surrender 
and  cancellation  of  such  old  stock.  This  section  does  not  authorize 
the  increase  or  reduction  of  the  capital  stock  of  such  corporation. 

§  57.  Voluntary  dissolution. — Any  stock  corporation,  except  a 
moneyed  or  a  railroad  corporation,  may  be  dissolved  before  the  ex- 
piration of  the  time  limited  in  its  certificate  of  incorporation  or  in 
its  charter  as  follows:  The  board  of  directors  of  any  such  corpora- 
tion may  at  a  meeting  called  for  that  purpose  upon,  at  least,  three 
days'  notice  to  each  director,  by  a  vote  of  a  majority  of  the  whole 
board,  adopt  a  resolution  that  it  is  in  their  opinion  advisable  to  dis- 
solve such  corporation  forthwith,  and  thereupon  shall  call  a  meet- 


THE  STOCK   CORPORATION   LAW.  321 

ing  of  the  stockholders  for  the  purpose  of  voting  upon  a  proposition 
that  such  corporation  be  forthwith  dissolved.  Such  meeting  of  the 
stockholders  shall  be  held,  not  less  than  thirty  nor  more  than  sixty 
days  after  the  adoption  of  such  resolution,  and  the  notice  of  the 
time  and  place  of  such  meeting  so  called  by  the  directors  shall  be 
published  in  one  or  more  newspapers  published  and  circulating  in 
the  county  wherein  such  corporation  has  its  principal  office,  at  least 
once  a  week  for  three  weeks  successively  next  preceding  the  time 
appointed  for  holding  such  meeting,  and  on  or  before  the  day  of  the 
first  publication  of  such  notice,  a  copy  thereof  shall  be  served  per- 
sonally on  each  stockholder,  or  mailed  to  him  at  his  last  known  post- 
office  address.  Such  meeting  shall  be  held  in  the  city,  town  or  vil- 
lage in  which  the  last  preceding  annual  meeting  of  the  corporation 
was  held,  and  said  meeting  may,  on  the  day  so  appointed,  by  the 
consent  of  a  majority  in  interest  of  the  stockholders  present,  be 
adjourned  from  time  to  time,  and  notice  of  such  adjournment  shall 
be  published  in  the  newspapers  in  which  the  notice  of  the  meeting 
is  published.  If  at  any  such  meeting  the  holders  of  two-thirds  in 
amount  of  the  stock  of  the  corporation,  then  outstanding,  shall,  in 
person  or  by  attorney,  consent  that  such  dissolution  shall  take  place 
and  signify  such  consent,  in  writing,  then,  such  corporation  shall 
file  such  consent,  attested  by  its  secretary  or  treasurer,  and  its  presi- 
dent or  vice-president,  together  with  the  powers  of  attorney  signed 
by  such  stockholders  executing  such  consent  by  attorney,  with  a 
statement  of  the  names  and  residences  of  the  then  existing  board  of 
directors  of  said  corporation,  and  the  names  and  residences  of  its 
officers  duly  verified  by  the  secretary  or  treasurer  or  president  of 
said  corporation,  in  the  office  of  the  Secretary  of  State.  The  Secretary 
of  State  shall  thereupon  issue  to  such  corporation,  in  duplicate,  a 
certificate  of  the  filing  of  such  papers  and  that  it  appears  therefrom 
that  such  corporation  has  complied  with  this  section  in  order  to  be 
dissolved,  and  one  of  such  duplicate  certificates  shall  be  filed  by 
such  corporation  in  the  office  of  the  clerk  of  the  county  in  which  such 
corporation  has  its  principal  office;  and  thereupon  such  corporation 
shall  be  dissolved  and  shall  cease  to  carry  on  business,  except  for 
the  purpose  of  adjusting  and  winding  up  its  business.  The  board 
of  directors  shall  cause  a  copy  of  such  certificate  to  be  published  at 
least  once  a  week  for  two  weeks  in  one  or  more  newspapers  pub- 
lished and  circulating  in  the  county  in  which  the  principal  office  of 
such  corporation  is  located,  and  at  the  expiration  of  such  publica- 
tion, the  said  corporation  by  its  board  of  directors  shall  proceed  to 
adjust  and  wind  up  its  business  and  affairs  with  power  to  carry  out 
its  contracts  and  to  sell  its  assets  at  public  or  private  sale,  and  to 
apply  the  same  in  discharge  of  debts  and  obligations  of  such  cor- 
poration, and,  after  paying  and  adequately  providing  for  the  payment 
of  such  debts  and  obligations,  to  distribute  the  balance  of  assets 
among  the  stockholders  of  said  corporation,  according  to  their  re- 
spective rights  and  interests.  Said  corporation  shall  nevertheless 
continue  in  existence  for  the  purpose  of  paying,  satisfying  and  dis- 
charging any  existing  debts  or  obligations,  collecting  and  distribut- 
ing its  assets  and  doing  all  other  acts  required  in  order  to  adjust 
and  wind  up  its  business  and  affairs,  and  may  sue  and  be  sued  for 
the  purpose  of  enforcing  such  debts  or  obligations,  until  its  business 
and  affairs  are  fully  adjusted  and  wound  up.  After  paying  or  ade- 
quately providing  for  the  debts  and  obligations  of  the  corporation 
the  directors  may,  with  the  written  consent  of  the  holders  of  two- 
thirds  in  amount  of  the  capital  stock,  sell  the  remaining  assets  or 


322  NEW   YORK    CORPORATIONS.  [§§  58-59 

any  part  thereof  to  a  corporation  organized  under  the  laws  of  this 
or  any  other  state,  and  engaged  in  a  business  of  the  same  general 
character,  and  take  in  payment  therefor  the  stock  or  bonds  or  both 
of  such  corporation  and  distribute  them  among  the  stockholders, 
in  lieu  of  money,  in  proportion  to  their  interest  therein,  but  no  such 
sale  shall  be  valid  as  against  any  stockholder  who,  within  sixty  days 
after  the  mailing  of  notice  to  him  of  such  sale,  shall  apply  to  the 
Supreme  Court  in  the  manner  provided  by  section  thirty-three  of 
this  act,  for  an  appraisal  of  the  value  of  his  interest  in  the  assets  so 
sold;  unless  within  thirty  days  after  such  appraisal  the  stockholders 
consenting  to  such  sale,  or  some  of  them,  shall  pay  to  such  object- 
ing stockholder  or  deposit  for  his  account,  in  the  manner  directed 
by  the  court,  the  amount  of  such  appraisal  and  upon  such  payment 
or  deposit  the  interest  of  such  objecting  stockholder  shall  vest  in 
the  person  or  persons  making  such  payment  or  deposit. 

§  58.  Merger. — Any  domestic  stock  corporation  and  any  for- 
eign stock  corporation  authorized  to  do  business  in  this  State  law- 
fully owning  all  the  stock  of  any  other  stock  corporation  organized 
for,  or  engaged  in  business  similar  or  incidental  to  that  of  the  pos- 
sessor corporation  may  file  in  the  office  of  the  Secretary  of  State 
under  its  common  seal,  a  certificate  of  such  ownership,  and  of  the 
resolution  of  its  board  of  directors  to  merge  such  other  corporation, 
and  thereupon  it  shall  acquire  and  become,  and  be  possessed  of  all 
the  estate,  property,  rights,  privileges  and  franchises  of  such  other 
corporation,  and  they  shall  vest  in  and  be  held  and  enjoyed  by  it  as 
fully  and  entirely  and  without  change  or  diminution  as  the  same 
were  before  held  and  enjoyed  by  such  other  corporation,  and  be 
managed  and  controlled  by  the  board  of  directors  of  such  possessor 
corporation,  and  in  its  name,  but  without  prejudice  to  any  liabilities 
of  such  other  corporation  or  the  rights  of  any  creditors  thereof.  Any 
bridge  corporation  may  be  merged  under  this  section  with  any  rail- 
road corporation  which  shall  have  acquired  the  right  by  contract  to 
run  its  cars  over  the  bridge  of  such  bridge  corporation. 

§  59.  Change  of  place  of  business. — Any  stock  corporation  now 
existing  or  hereafter  organized  under  the  laws  of  this  State,  except 
moneyed  corporations,  may  at  any  time  change  its  principal  office 
and  place  of  business  from  the  city,  town  or  county  named  in  its 
certificate  of  incorporation,  or  to  which  it  may  have  been  changed 
under  the  provisions  of  this  section,  to  any  other  city,  town  or  county 
in  this  State,  in  which  it  may  desire  to  actually  transact  and  carry 
on  its  regular  business  from  day  to  day,  provided,  and*  such  change 
has  been  authorized,  either  by  unanimous  consent  of  the  stock- 
holders expressed  in  writing  and  duly  acknowledged  and  filed  in 
the  office  of  the  Secretary  of  State,  or  by  a  vote  of  the  stockholders 
of  said  corporation  at  a  special  meeting  of  stockholders  called  for 
that  purpose.  When  such  change  shall  be  authorized  by  the  stock- 
holders as  herein  provided,  the  president  and  secretary  and  a  ma- 
jority of  the  directors  of  such  corporation  shall  sign  a  certificate 
stating  the  name  of  said  corporation,  the  city,  town  and  county  where 
its  principal  office  and  place  of  business  was  originally  located,  and 
to  which  it  may  have  been  subsequently  changed,  and  the  city, 
town  and  county  to  which  it  is  desired  to  change  its  said  principal 
office  and  place  of  business,  and  that  it  is  the  purpose  of  said  cor- 
poration to  actually  transact  and  carry  on  its  regular  business  from 

•  So  in  original. 


§§  60-62]  THE  STOCK   CORPORATION   LAW.  323 

day  to  day  at  such  place,  and  that  such  change  has  been  authorized 
as  herein  provided,  and  the  names  of  the  directors  of  said  corporation 
and  their  respective  places  of  residence,  which  certificate  shall  be 
verified  by  the  oaths  of  all  the  persons  signing  the  same,  and  when 
so  signed  and  verified,  shall  be  filed  in  the  office  of  the  Secretary  of 
State  and  a  duplicate  thereof  in  the  office  of  the  clerk  of  the 
county  from  which  said  principal  office  and  place  of  business  is 
about  to  be  removed  or  changed,  and  another  in  the  office  of  the 
clerk  of  the  county  to  which  said  removal  or  change  is  to  be  made, 
and  thereupon  the  principal  office  and  place  of  business  of  such  cor- 
poration shall  be  changed  as  stated  in  said  certificate. 

§  60.  Liabilities  of  officers,  directors  and  stockholders  of  foreign 
corporations. — Except  as  otherwise  provided  in  this  chapter  the  offi- 
cers, directors  and  stockholders  of  a  foreign  stock  corporation  trans- 
acting business  in  this  State,  except  moneyed  and  railroad  corpora- 
tions, shall  be  liable  under  the  provisions  of  this  chapter,  in  the 
same  manner  and  to  the  same  extent  as  the  officers,  directors  and 
stockholders  of  a  domestic  corporation,  for: 

1.  The  making  of  unauthorized  dividends; 

2.  The  creation  of  unauthorized  and  excessive  indebtedness; 

3.  Unlawful  loans  to  stockholders; 

4.  Making  false   certificates,   reports   or  public   notices; 

5.  An  illegal  transfer  of  the  stock  and  property  of  such  corpora- 
tion, when  it  is  insolvent  or  its  insolvency  is  threatened; 

6.  The  failure  to  file  an  annual  report. 

Such  liabilities  may  be  enforced  in  the  courts  of  this  State,  in 
the  same  manner  as  similar  liabilities  imposed  by  law  upon  the 
officers,  directors  and  stockholders  of  domestic  corporations. 

§  61.  Dissolution  by  incorporators. — The  incorporators  named 
in  any  certificate  of  incorporation  filed  for  the  purpose  of  creating 
a  domestic  stock  corporation,  other  than  a  moneyed  or  transporta- 
tion corporation,  may,  before  the  payment  of  any  part  of  the  capital, 
and  before  beginning  business,  surrender  all  corporate  rights  and 
franchises,  by  signing,  verifying  and  filing  in  the  office  of  the  Secre- 
tary of  State  and  the  clerk  of  the  county  where  the  certificate  of 
incorporation  is  filed,  a  certificate  setting  forth  that  no  part  of  the 
capital  has  been  paid,  that  there  are  no  liabilities,  that  such  busi- 
ness has  not  been  begun,  and  surrendering  all  rights  and  franchises; 
and  proof  of  the  facts  set  forth  in  such  certificate  to  the  satisfaction 
of  the  Secretary  of  State;  and  thereupon  the  said  corporation  shall 
be  dissolved,  and  its  corporate  existence  and  powers  shall  cease. 

§  62.  Partly  Paid  Stock. — The  original  or  the  amended  certifi- 
cate of  incorporation  of  any  stock  corporation  may  contain  a  provi- 
sion expressly  authorizing  the  issue  of  the  whole  or  of  any  part  of 
the  capital  stock  as  partly  paid  stock,  subject  to  calls  thereon  until 
the  whole  thereof  shall  have  been  paid  in.  In  such  case,  if  in  or 
upon  the  certificate  issued  to  represent  such  stock,  the  amount  paid 
thereon  shall  be  specified,  the  holder  thereof  shall  not  be  subject  to 
any  liability  except  for  the  payment  to  the  corporation  of  the  amount 
remaining  unpaid  upon  such  stock,  and  for  the  payment  of  indebted- 
ness to  employees  pursuant  to  sections  fifty-four  and  fifty-five  of 
this  chapter;  and  in  any  such  case,  the  corporation  may  declare  and 
may  pay  dividends  upon  the  basis  of  the  amount  actually  paid  upon 
the  respective  shares  of  stock  instead  of  upon  the  par  value  thereof. 


THE  GENERAL  CORPORATION  LAW. 


Laws  of  1890,  Chapter  563,  as  Amended  to  January  ist,  1906. 

SECTION  i.  Short  title. 

2.  Classification  of  corporations. 

3.  Definitions. 

4.  Qualifications  of  incorporators. 

5.  Filing  and  recording  certificates  of  incorporation. 

6.  Corporations  of  the  same  name  prohibited. 

7.  Amended  and  supplemental  certificates. 

8.  Lost  or  destroyed  certificates. 

9.  Certificate  and  other  papers  as  evidence. 

10.  Prohibition   of  other  than   statutory  powers. 

11.  Grant  of  general  powers. 

12.  Limitation  of  amount  of  property  of  a  non-stock  corpora- 

tion. 

13.  Acquisition  of  additional  real  property. 

14.  Acquisition  of  property  in  other  states. 

15.  Certificate  of  authority  of  a  foreign  corporation. 

16.  Proof  to  be  filed  before  granting  certificate. 

17.  Acquisition  of  real  property  in  this  State  by  certain  for- 

eign corporations. 

18.  Acquisition   by  foreign    corporations   of  real   property  in 

this  State  upon  judicial  sales. 

19.  Prohibition  of  banking  powers. 

20.  Qualification  of  members  as  voters. 

21.  Proxies. 

22.  Challenges. 

23.  Effect  of  failure  to  elect  directors. 

24.  Mode  of  calling  special  election  of  directors. 

25.  Mode  of  conducting  special  election  of  directors. 

26.  Qualification    of  voters   and    canvass   of   votes   at    special 

elections. 

27.  Powers  of  Supreme  Court  respecting  elections. 

28.  Stay  of  proceedings  in  actions  collusively  brought. 

29.  Quorum  of  directors  and  power  of  majority. 

30.  Directors  as  trustees  in  case  of  dissolution. 

31.  Forfeiture  for  non-user. 

32.  Extension  of  corporate  existence. 

33.  Conflicting  corporate  laws. 

34.  Laws  repealed. 

35.  Saving  clause. 

36.  Construction. 

37.  Law  revived. 

38.  When  notice  or  lapse  of  time  unnecessary. 

39.  As  to  acts  of  directors. 

40.  Alteration  and  repeal  of  charter. 

324 


§§  J-3]  THE   GENERAL    CORPORATION    LAW.  325 

§  I.  Short  title. — This  chapter  shall  be  known  as  the  general 
corporation  law. 

§  2.     Classification  of  corporations. — A  corporation  shall  be  either, 

1.  A   municipal   corporation, 

2.  A   stock  corporation, 

3.  A  non-stock  corporation,  or 

4.  A  mixed  corporation. 

A  stock  corporation  shall  be  either, 

1.  A  monied  corporation, 

2.  A   transportation    corporation,   or 

3.  A  business  corporation. 

A  non-stock  corporation  shall  be  either, 

1.  A  religious  corporation,  or 

2.  A  membership  corporation. 

A  mixed  corporation  shall  be  either, 

1.  A  cemetery  corporation, 

2.  A  library  corporation, 

3.  A  co-operative  corporation, 

4.  A  board  of  trade  corporation,  or 

5.  An  agricultural  and  horticultural  corporation. 
A  transportation  corporation  shall  be  either, 

1.  A  railroad  corporation,  or 

2.  A  transportation  corporation  other  than  a  railroad  cor- 

poration. 

A  membership  corporation  shall  include  benevolent  orders  and 
fire  and  soldiers'  monument  corporations. 

A  reference  in  a  general  law  to  a  class  of  corporations  described 
in  accordance  with  this  classification  shall  include  all  corporations 
theretofore  formed  belonging  to  such  class. 

§  3.  Definitions. — i.  A  municipal  corporation  includes  a  county, 
town,  school  district,  village  and  city,  and  any  other  territorial  di- 
vision of  the  State  established  by  law  with  powers  of  local  govern- 
ment. 

2.  A  stock  corporation  is  a  corporation  having  a  capital   stock 
divided   into    shares,   and    which    is    authorized    by    law   to    distribute 
to  the  holders  thereof  dividends  or  shares  of  the  surplus  profits  of 
the  corporation.     A  corporation  is  not  a  stock  corporation  because 
of   having  issued    certificates   called    certificates   of   stock,   but   which 
are  in  fact  merely  certificates  of  membership   and  which   is  not  au- 
thorized by  law  to  distribute  to  its  members  any  dividends  or  share 
of  profits  arising  from  the  operations  of  the  corporation. 

3.  The   term   non-stock   corporation   includes    every   corporation 
other  than  a  stock  corporation. 

4.  A    moneyed    corporation    is    a    corporation    formed    under    or 
subject  to  the  banking  or  the  insurance  law. 

5.  A  domestic  corporation  is  a  corporation  incorporated  by  or 
under  the  laws  of  the  State  or  colony  of  New  York.     Every  corpora- 
tion which  is  not  a  domestic   corporation   is   a   foreign   corporation, 
except  as  provided  by  the   code  of  civil   procedure   for  the   purpose 
of  construing  such  code. 

6.  The   term   directors,   when   used   in    relation   to    corporations, 
shall   include   trustees   or   other   persons,   by   whatever   name   known, 
duly  appointed  or  designated  to  manage  the  affairs  of  the   corpora- 
tion. 


326  NEW   YORK   CORPORATIONS.  [§§4-6 

/.  The  term,  certificate  of  incorporation,  shall  include  articles  of 
association  or  any  other  written  instruments  required  by  law  to  be 
filed,  to  effect  the  incorporation  of  a  corporation,  including  a  certified 
copy  of  an  original  certificate  of  incorporation  filed  for  such  pur- 
pose in  pursuance  of  law. 

8.  The  term,  member  of  a  corporation,  shall  include  every  per- 
son having  a  right  to  vote  at  a  meeting  of  the  corporation  for  the 
election  of  directors,  other  than  a  person  having  a  right  to  vote  only 
upon  a  proxy. 

9.  The  term,  office  of  a  corporation,1  means   its   principal   office 
within  the  State  or  principal  place  of  business  within  the  State,  if  it 
has  no  principal  office  therein. 

10.  The  term,  business  of  a  corporation,  when  used  with  refer- 
ence to  a  non-stock  corporation,  includes  the  operations  for  the  con- 
duct of  which  it  is  incorporated. 

n.  The  term,  corporate  law  or  laws,  when  used  in  any  law 
forming  a  part  of  the  revision  of  the  general  laws  of  the  State  of 
which  this  chapter  is  a  part,  means  the  general  laws  of  this  State 
relating  to  corporations  included  in  such  revision. 

§  4.  Qualifications  of  incorp orators. — A  certificate  of  incorpora- 
tion must  be  executed  by  natural  persons,  who  must  be  of  full  age, 
and  at  least  two-thirds  of  them  must  be  citizens  of  the  United 
States  and  one  of  them  a  resident  of  this  State.  This  section  shall 
not  apply  to  a  corporation  formed  by  the  reincorporation  or  con- 
solidation of  existing  corporations,  or  to  the  reorganization  of  a 
corporation  upon  the  sale  of  the  property  and  franchises  of  a  pre- 
viously existing  corporation  or  otherwise. 

§  5.  Filing  and  recording  certificates  of  incorporation. — Every 
certificate  of  incorporation  including  the  corporate  name  or  title  and 
every  amended  or  supplemental  certificate,  and  every  certificate  which 
alters  the  provisions  of  any  certificate  of  incorporation  or  any 
amended  or  supplemental  certificate,  hereafter  executed  shall  be  in 
the  English  language,  and  except  of  a  religious,  cemetery,  moneyed, 
municipal  or  fire  department  corporation,  shall  be  filed  in  the  office 
of  the  Secretary  of  State,  and  shall  be  by  him  duly  recorded  and 
indexed  in  books  specially  provided  therefor,  and  a  certified  copy  of 
such  certificate  or  amended  or  supplemental  certificate  with  a  cer- 
tificate of  the  Secretary  of  State  of  such  filing  and  record,  or  a 
duplicate  original  of  such  certificate  or  amended  or  supplemental 
certificate  shall  be  filed  and  similarly  recorded  and  indexed  in  the 
office  of  the  clerk  of  the  county  in  which  the  office  of  the  corporation 
is  to  be  located,  or,  if  it  be  a  non-stock  corporation,  and  such  county 
be  not  determined  upon  at  the  time  of  executing  the  certificate  of 
incorporation,  in  such  county  clerk's  office  as  the  judge  approving 
the  certificate  shall  direct.  All  taxes  required  by  law  to  be  paid 
before  or  upon  incorporation  and  the  fees  for  filing  and  recording 
such  certificate  must  be  paid  before  filing.  No  corporation  shall 
exercise  any  corporate  powers  or  privileges  until  such  taxes  and 
fees  have  been  paid. 

§  6.  Corporate  names. — No  certificate  of  incorporation  of  a  pro- 
posed corporation  having  the  same  name  as  a  corporation  authorized 
to  do  business  under  the  laws  of  this  State,  or  a  name  so  nearly  re- 
sembling it  as  to  be  calculated  to  deceive,  shall  be  filed  or  recorded 
in  any  office  for  the  purpose  of  effecting  its  incorporation,  or  of  au- 


§§  7~IQ]  THE   GENERAL    CORPORATION    LAW.  327 

thorizing  it  to  do  business  in  this  State.  A  corporation  formed  by 
the  reincorporation,  reorganization  or  consolidation  of  other  corpora- 
tions or  upon  the  sale  of  the  property  or  franchises  of  a  corporation, 
may  have  the  same  name  as  the  corporation  or  one  of  the  cor- 
porations to  whose  franchises  it  has  succeeded.  No  corporation 
shall  be  hereafter  organized  under  the  laws  of  this  State  with  the 
word  trust,  bank,  banking,  insurance,  assurance,  indemnity,  guaran- 
tee, guaranty,  savings,  investment,  loan  or  benefit  as  part  of  its 
name,  except  a  corporation  formed  under  the  banking  law  or  the  in- 
surance law. 

§  7.  Amended  and  supplemental  certificates. — If  in  the  original 
or  amended  certificate  of  incorporation  of  any  corporation,  or  if  in 
a  supplemental  certificate  of  any  corporation  any  informality  exists, 
or  if  any  such  certificate  contain  any  matter  not  authorized  by  law 
to  be  stated  therein,  or  if  the  proof  or  acknowledgment  thereof  shall 
be  defective,  the  corporators  or  directors  of  the  corporation  may 
make  and  file  an  amended  certificate  correcting  such  informality  or 
defect  or  striking  out  such  unauthorized  matter;  and  the  certificate 
amended  shall  be  deemed  to  be  amended  accordingly  as  of  the  date 
such  amended  certificate  was  filed,  and  upon  the  filing  of  such  an 
amended  certificate  of  incorporation,  the  corporation  shall  then  for 
all  purposes  be  deemed  to  be  a  corporation  from  the  time  of  filing 
the  original  certificate. 

The  Supreme  Court  may,  upon  due  cause  shown,  and  proof 
made,  and  upon  notice  to  the  Attorney  General,  and  to  such  other 
persons  as  the  court  may  direct,  and  upon  such  terms  and  condi- 
tions as  it  may  impose,  amend  any  certificate  of  incorporation  which 
fails  to  express  the  true  object  and  purpose  of  the  corporation,  so 
as  to  truly  set  forth  such  object  and  purpose. 

When  an  amended  or  supplemental  certificate  is  filed,  an  entry 
shall  be  made  upon  the  margin  of  the  index  and  record  of  the  original 
certificate  of  the  date  and  place  of  record  of  every  such  amended 
certificate. 

The  amendment  of  a  certificate  under  this  section  shall  be 
without  prejudice  to  any  pending  action  or  proceeding,  or  to  any 
rights  previously  accrued. 

§  8.  Lost  or  destroyed  certificates. — If  either  of  the  certificates 
of  incorporation  shall  be  lost  or  destroyed  after  filing,  a  certified 
copy  of  the  other  certificate  may  be  filed  in  the  place  of  the  one  so 
lost  or  destroyed  and  as  of  the  date  of  its  original  filing,  and  such 
certified  copy  shall  have  the  same  force  and  effect  as  the  original 
certificate  had  when  filed. 

§  9.  Certificate  and  other  papers  as  evidence. — The  certificate  of 
incorporation  of  any  corporation  duly  filed  shall  be  presumptive 
evidence  of  its  incorporation,  and  any  amended  certificate  or  other 
paper  duly  filed  or  recorded  relating  to  the  incorporation  of  any 
corporation,  or  its  existence  or  management,  and  containing  facts 
required  or  authorized  by  law  to  be  stated  therein,  shall  be  pre- 
sumptive evidence  of  the  existence  of  such  facts. 

§  10.  Limitation  of  powers. — No  corporation  shall  possess  or 
exercise  any  corporate  powers  not  given  by  law,  or  not  necessary  to 
the  exercise  of  the  powers  so  given.  The  certificate  of  incorporation 
of  any  corporation  may  contain  any  provision  for  the  regulation  of 


328  NEW   YORK    CORPORATIONS.  [§§  1 1-14 

the  business  and  the  conduct  of  the  affairs  of  the  corporation,  and 
any  limitation  upon  its  powers,  or  upon  the  powers  of  its  directors 
and  stockholders,  which  does  not  exempt  them  from  the  performance 
of  any  obligation  or  the  performance  of  any  duty  imposed  by  law. 

§  n.  Grant  of  general  powers. — Every  corporation  as  such  has 
power,  though  not  specified  in  the  law  under  which  it  is  incorporated: 

1.  To  have  succession  for  the  period  specified  in  its  certificate 
of    incorporation    or    by    law,    and    perpetually    when    no    period    is 
specified. 

2.  To  have  a  common  seal,  and  alter  the  same  at  pleasure. 

3.  To    acquire    by    grant,    gift,    purchase,    devise    or    bequest,   to 
hold   and   to   dispose   of  such   property   as   the   purposes   of  the   cor- 
poration   shall    require,    subject   to   such    limitations   as   may   be   pre- 
scribed by  law. 

4.  To  appoint  such  officers  and  agents  as  its  business  shall  re- 
quire, and  to  fix  their  compensation,  and 

5.  To    make    by-laws,    not    inconsistent    with    any    existing   law, 
for  the  management  of  its  property,  the  regulations*  of  its  affairs,  and 
the  transfer  of  its  stock,  if  it  has  any,  and  the  calling  of  meetings 
of   its   members.      Such   by-laws  may   also   fix   the   amount   of   stock, 
which  must  be  represented  at  meetings  of  the  stockholders  in  order 
to  constitute  a  quorum,  unless  otherwise  provided  by  law.     By-laws 
duly  adopted  at  a  meeting  of  the  members  of  the  corporation  shall 
control  the  action  of  its  directors.     No  by-law  adopted  by  the  board 
of  directors  regulating  the  election  of  directors  or  officers  shall  be 
valid  unless  published  for  at  least  once   a  week  for  two   successive 
weeks  in  a  newspaper  in  the  county  where  the  election  is  to  be  held, 
and  at  least  thirty  days  before  such  election.     Subdivisions  four  and 
five  of  this  section  shall  not  apply  to  municipal  corporations. 

§  12.  Enlargement  of  limitations  upon  the  amount  of  the  prop- 
erty of  non-stock  corporations. — If  any  general  or  special  law  here- 
tofore passed,  or  any  certificate  of  incorporation,  shall  limit  the 
amount  of  property  a  corporation  other  than  a  stock  corporation 
may  take  or  hold,  such  corporation  may  take  and  hold  property  of 
the  value  of  three  million  dollars  or  less,  or  the  yearly  income  de- 
rived from  which  shall  be  five  hundred  thousand  dollars  or  less,  not- 
withstanding any  such  limitations.  In  computing  the  value  of  such 
property,  no  increase  in  value  arising  otherwise  than  from  improve- 
ments made  thereon  shall  be  taken  into  account. 

§  13.  Acquisition  of  additional  real  property. — When  any  cor- 
poration shall  have  sold  or  conveyed  any  part  of  its  real  property, 
the  Supreme  Court  may,  notwithstanding  any  restriction  of  a  general 
or  special  law,  authorize  it  to  purchase  and  hold  from  time  to 
time  other  real  property,  upon  satisfactory  proof  that  the  value  of 
the  property  so  purchased  does  not  exceed  the  value  of  the  property 
so  sold  and  conveyed  within  the  three  years  next  preceding  the  ap- 
plication. 

§  14.  Acquisition  of  property  in  other  states. — Any  domestic  cor- 
poration transacting  business  in  other  states  or  foreign  countries 
may  acquire  and  dispose  of  such  property  as  shall  be  requisite  for 
such  corporation  in  the  convenient  transaction  of  its  business.  Any 
domestic  corporation  establishing  or  maintaining  a  charitable,  phil- 

*  So  In  original. 


§§  I5-l6]          THE   GENERAL   CORPORATION    LAW.  329 

anthropic  or  educational  institution  within  this  State  may  also  carry 
on  its  work  and  establish  or  maintain  one  or  more  branches  of  such 
institution  or  an  additional  institution  or  additional  institutions  in 
any  other  state,  the  District  of  Columbia  or  in  any  part  of  the  terri- 
tories or  dependencies  of  the  United  States  of  America  or  in  any 
foreign  country  and  for  either  of  said  purposes  may  take  by  devise 
or  bequest,  hold,  purchase,  mortgage,  sell  and  convey  or  otherwise 
dispose  of  such  real  and  personal  property  without  this  State  as  may 
be  requisite  therefor.  But  nothing  in  this  section  contained  shall  be 
construed  as  exempting  from  taxation  property  to  any  additional 
amount  than  is  now  allowed  to  such  corporation  under  existing 
laws. 

§  15.  Certificate  of  authority  of  a  foreign  corporation. — No  for- 
eign stock  corporation  other  than  a  monied  corporation,  shall  do 
business  in  this  State  without  having  first  procured  from  the  Secre- 
tary of  State  a  certificate  that  it  has  complied  with  all  the  require- 
ments of  law  to  authorize  it  to  do  business  in  this  State,  and  that 
the  business  of  the  corporation  to  be  carried  on  in  this  State  is  such 
as  may  be  lawfully  carried  on  by  a  corporation  incorporated  under 
the  laws  of  this  State  for  such  or  similar  business,  or,  if  more  than 
one  kind  of  business,  by  two  or  more  corporations  so  incorporated 
for  such  kinds  of  business  respectively.  The  Secretary  of  State  shall 
deliver  such  certificate  to  every  such  corporation  so  complying  with 
the  requirements  of  law.  No  such  corporation  now  doing  business 
in  this  State  shall  do  business  herein  after  December  31,  1892,  with- 
out having  procured  such  certificate  from  the  Secretary  of  State,  but 
any  lawful  contract  previously  made  by  the  corporation  may  be  per- 
formed and  enforced  within  the  State  subsequent  to  such  date.  No 
foreign  stock  corporation  doing  business  in  this  State  shall  main- 
tain any  action  in  this  State  upon  any  contract  made  by  it  in  this 
State  unless  prior  to  the  making  of  such  contract  it  shall  have  pro- 
cured such  certificate.  This  prohibition  shall  also  apply  to  any 
assignee  of  such  foreign  stock  corporation  and  to  any  person  claim- 
ing under  such  assignee  or  such  foreign  stock  corporation  or  under 
either  of  them.  No  certificate  of  authority  shall  be  granted  to  any 
foreign  corporation  having  the  same  name  as  an  existing  domestic 
corporation,  or  a  name  so  nearly  resembling  it  as  to  be  calculated 
to  deceive,  nor  to  any  foreign  corporation,  other  than  a  moneyed  or 
insurance  corporation,  with  the  word  "trust,"  "bank,"  "banking," 
"insurance,"  "assurance,"  "indemnity,"  "guarantee,"  "guaranty,"  "sav- 
ings," "investment,"  "loan,"  or  "benefit,"  as  a  part  of  its  name. 

§  16.  Proof  to  be  filed  before  granting  certificate. — Before  grant- 
ing such  certificate  the  Secretary  of  State  shall  require  every  such 
foreign  corporation  to  file  in  his  office  a  sworn  copy  in  the  English 
language  of  its  charter  or  certificate  of  incorporation  and  a  statement 
under  its  corporate  seal  particularly  setting  forth  the  business  or 
objects  of  the  corporation  which  it  is  engaged  in  carrying  on  or 
which  it  proposes  to  carry  on  within  the  State,  and  a  place  within 
the  State  which  is  to  be  its  principal  place  of  business,  and  desig- 
nating in  the  manner  prescribed  in  the  Code  of  Civil  Procedure  a 
person  upon  whom  process  against  the  corporation  may  be  served 
within  the  State.  The  person  so  designated  must  have  an  office  or 
place  of  business  at  the  place  where  such  corporation  is  to  have  its 
principal  place  of  business  within  the  State.  Such  designation  shall 


330  NEW   YORK    CORPORATIONS.  [§§  I/-2O 

continue  in  force  until  revoked  by  an  instrument  in  writing  designat- 
ing in  like  manner  some  other  person  upon  whom  process  against 
the  corporation  may  be  served  in  this  State.  If  the  person  so  desig- 
nated dies  or  removes  from  the  place  where  the  corporation  has  its 
principal  place  of  business  within  the  State,  and  the  corporation  does 
not  within  thirty  days  after  such  death  or  removal  designate  in  like 
manner  another  person  upon  whom  process  against  it  may  be  served 
within  the  State,  the  Secretary  of  State  may  revoke  the  authority  of 
the  corporation  to  do  business  within  the  State,  and  process  against 
the  corporation  in  an  action  upon  any  liability  incurred  within  this 
State  before  such  revocation,  may,  after  such  death  or  removal,  and 
before  another  designation  is  made,  be  served  upon  the  Secretary  of 
State.  At  the  time  of  such  service  the  plaintiff  shall  pay  to  the 
Secretary  of  State  two  dollars  to  be  included  in  his  taxable  costs 
and  disbursements,  and  the  Secretary  of  State  shall  forthwith  mail 
a  copy  of  such  notice  to  such  corporation  if  its  address,  or  the  ad- 
dress of  any  officer  thereof,  is  known  to  him. 

§  17.  Acquisition  of  real  property  in  this  State  by  certain  for- 
eign corporations. — Any  foreign  corporation  created  under  the  laws 
of  the  United  States,  or  of  any  state  or  territory  thereof,  and  doing 
business  in  this  State,  may  acquire  such  real  property  in  this  State 
as  may  be  necessary  for  its  corporate  purposes  in  the  transaction  of 
its  business  in  this  State,  and  convey  the  same  by  deed  or  otherwise 
in  the  same  manner  as  a  domestic  corporation. 

§  18.  Acquisition  by  foreign  corporation  of  real  property  in  this 
State. — Any  foreign  corporation  may  purchase  at  a  sale  upon  the 
foreclosure  of  any  mortgage  held  by  it,  or,  upon  any  judgment  or 
decree  for  debts  due  it,  or,  upon  any  settlement  to  secure  such  debts, 
any  real  property  within  this  State  covered  by  or  subject  to  such 
mortgage,  judgment,  decree  or  settlement,  and  may  take  by  devise 
any  real  property  situated  within  this  State  and  hold  the  same  for 
not  exceeding  five  years  from  the  date  of  such  purchase,  or  from  the 
time  when  the  right  to  the  possession  thereof  vests  in  such  devisee, 
and  convey  it  by  deed  or  otherwise  in  the  same  manner  as  a  domestic 
corporation. 

§  19.  Prohibition  of  banking  powers. — No  corporation  except  a 
corporation  formed  under  or  subject  to  the  banking  laws,  shall  by 
any  implication  or  construction  be  deemed  to  possess  the  power  of 
carrying  on  the  business  of  discounting  bills,  notes  or  other  evidences 
of  debt,  of  receiving  deposits,  or  buying  and  selling  bills  of  exchange, 
or  shall  issue  bills,  notes  or  other  evidences  of  debt  for  circulation 
as  money. 

§  20.  Qualification  of  members  as  voters. — Unless  otherwise  pro- 
vided in  the  certificate  of  incorporation,  every  stockholder  of  record 
of  a  stock  corporation  shall  be  entitled  at  every  meeting  of  the  cor- 
poration to  one  vote  for  every  share  of  stock  standing  in  his  name 
on  the  books  of  the  corporation;  and  at  every  meeting  of  a  non-stock 
corporation,  every  member,  unless  disqualified  by  the  by-laws,  shall 
be  entitled  to  one  vote.  The  stockholders  of  a  stock  corporation, 
by  a  by-law  adopted  by  vote  at  any  annual  meeting,  or  at  any  special 
meeting  duly  called  for  such  purpose,  may  prescribe  a  period,  not  ex- 
ceeding forty  days  prior  to  meetings  of  the  stockholders,  during 
which  no  transfer  of  stock  on  the  books  of  the  corporation  may  be 


§  21  ]  THE    GENERAL    CORPORATION    LAW.  331 

made.  Except  in  cases  of  express  trust,  or  in  which  other  provision 
shall  have  been  made  by  written  agreement  between  the  parties,  the 
record  holder  of  stock  which  shall  be  held  by  him  as  security,  or 
which  shall  actually  belong  to  another,  upon  demand  therefor  and 
payment  of  necessary  expenses  thereof,  shall  issue  to  such  pledger 
or  to  such  actual  owner  of  such  stock,  a  proxy  to  vote  thereon.  The 
certificate  of '  incorporation  of  any  stock  corporation  may  provide 
that  at  all  elections  of  directors  of  such  corporation,  each  stock- 
holder shall  be  entitled  to  as  many  votes  as  shall  equal  the  number  of 
his  shares  of  stock  multiplied  by  the  number  of  directors  to  be 
elected,  and  that  he  may  cast  all  of  such  votes  for  a  single  director 
or  may  distribute  them  among  the  number  to  be  voted  for,  or  any 
two  or  more  of  them  as  he  may  see  fit,  which  right,  when  exercised, 
shall  be  termed  cumulative  voting.  The  stockholders  of  a  corpora- 
tion heretofore  formed,  who,  by  the  provisions  of  laws  existing  on 
April  thirty,  eighteen  hundred  and  ninety-one,  were  entitled  to  the 
exercise  of  such  right,  may  hereafter  exercise  such  right  according 
to  the  provision  of  this  section.  A  stockholder  may,  by  agreement 
in  writing,  transfer  his  stock  to  any  person  or  persons  for  the  pur- 
pose of  vesting  in  him  or  them  the  right  to  vote  thereon  for  a  time 
not  exceeding  five  years  upon  terms  and  conditions  stated,  pursuant  to 
which  such  person  or  persons  shall  act;  every  other  stockholder, 
upon  his  request  therefor  may,  by  a  like  agreement  in  writing  also 
transfer  his  stock  to  the  same  person  or  persons  and  thereupon  may 
participate  in  the  terms,  conditions  and  privileges  of  such  agree- 
ment; the  certificates  of  stock  so  transferred  shall  be  surrendered 
and  cancelled  and  certificates  therefor  issued  to  such  transferee  or 
transferees  in  which  it  shall  appear  that  they  are  issued  pursuant 
to  such  agreement  and  in  the  entry  of  such  transferee  or  transferees 
as  owners  of  such  stock  in  the  proper  books  of  said  corporation  that 
fact  shall  also  be  noted  and  thereupon  he  or  they  may  vote  upon 
the  stock  so  transferred  during  the  time  in  such  agreement  speci- 
fied; a  duplicate  of  every  such  agreement  shall  be  filed  in  the  office 
of  the  corporation  where  its  principal  business  is  transacted  and  be 
open  to  the  inspection  of  any  stockholder,  daily,  during  business 
hours.  No  member  of  a  corporation  shall  sell  his  vote  or  issue  a 
proxy  to  vote  to  any  person  for  any  sum  of  money  or  anything  of 
value.  The  books  and  papers  containing  the  record  of  membership 
of  the  corporation  shall  be  produced  at  any  meeting  of  its  members 
upon  the  request  of  any  member.  If  the  right  to  vote  at  any  such 
meeting  shall  be  challenged,  the  inspectors  of  election,  or  other  per- 
sons presiding  thereat,  shall  require  such  books,  if  they  can  be 
had,  to  be  produced  as  evidence  of  the  right  of  the  person  challenged 
to  vote  at  such  meeting,  and  all  persons  who  may  appear  from  such 
books  to  be  members  of  the  corporation  may  vote  at  such  meeting 
in  person  or  by  proxy,  subject  to  the  provisions  of  this  chapter. 

§  21.  Proxies. — Every  member  of  a  corporation,  except  a  re- 
ligious corporation,  entitled  to  vote  at  any  meeting  thereof  may  so 
vote  by  proxy. 

No  officer,  clerk,  teller  or  bookkeeper  of  a  corporation  formed 
under  or  subject  to  the  banking  law  shall  act  as  proxy  for  any 
stockholder  at  any  meeting  of  any  such  corporation. 

Every  proxy  must  be  executed  in  writing  by  the  member  him- 
self, or  by  his  duly  authorized  attorney.  No  proxy  hereafter  made 
shall  be  valid  after  the  expiration  of  eleven  months  from  the  date  of 


332  NEW   YORK   CORPORATIONS.  [§§  22-25 

its  execution  unless  the  member  executing  it  shall  have  specified 
therein  the  length  of  time  it  is  to  continue  in  force,  which  shall  be 
for  some  limited  period.  Every  proxy  shall  be  revocable  at  the 
pleasure  of  the  person  executing  it;  but  a  corporation  having  no  capi- 
tal stock  may  prescribe  in  its  by-laws  the  persons  who  may  act  as 
proxies  for  members,  and  the  length  of  time  for  which  proxies  may 
be  executed. 

§  22.  Challenges. — Every  member  of  a  corporation  offering  to 
vote  at  any  election  or  meeting  of  the  corporation  shall,  if  required 
by  an  inspector  of  election  or  other  officer  presiding  at  such  election 
or  meeting,  or  by  any  other  member  present,  take  and  subscribe  the 
following  oath:  "I  do  solemnly  swear  that  in  voting  at  this  election 
I  have  not,  either  directly,  indirectly  or  impliedly,  received  any 
promise  or  any  sum  of  money  or  anything  of  value  to  influence  the 
giving  of  my  vote  or  votes  at  this  meeting  or  as  a  consideration 
therefor."  Any  person  offering  to  vote  as  proxy  for  any  other  per- 
son shall  present  his  proxy  and,  if  so  required,  take  and  subscribe 
the  following  oath:  "I  do  solemly  swear  that  I  have  not,  either  di- 
rectly, indirectly  or  impliedly,  given  any  promise  or  any  sum  of 
money  or  anything  of  value  to  induce  the  giving  of  a  proxy  to  me 
to  vote  at  this  election,  or  received  any  promise  or  any  sum  of  money 
or  anything  of  value  to  influence  the  giving  of  my  vote  at  this  meet- 
ing, or  as  a  consideration  therefor."  The  inspectors  or  persons  pre- 
siding at  the  election  may  administer  such  oath,  and  all  such  oaths 
and  proxies  shall  be  filed  in  the  office  of  the  corporation. 

§  23.  Effect  of  failure  to  elect  directors. — If  the  directors  shall 
not  be  elected  on  the  day  designated  in  the  by-laws,  or  by  law,  the 
corporation  shall  not  for  that  reason  be  dissolved;  but  every  director 
shall  continue  to  hold  his  office  and  discharge  his  duties  until  his 
successor  has  been  elected. 

§  24.  Mode  of  calling  special  election  of  directors. — If  the  elec- 
tion has  not  been  held  on  the  day  so  designated,  the  directors  shall 
forthwith  call  a  meeting  of  the  members  of  the  corporation  for  the 
purpose  of  electing  directors,  of  which  meeting  notice  shall  be  given 
in  the  same  manner  as  of  the  annual  meeting  for  the  election  of 
directors. 

If  such  meeting  shall  not  be  so  called  within  one  month,  or,  if 
held,  shall  result  in  a  failure  to  elect  directors,  any  member  of  the 
corporation  may  call  a  meeting  for  the  purpose  of  electing  directors 
by  publishing  a  notice  of  the  time  and  place  of  holding  such  meet- 
ing at  least  once  in  each  week  for  two  successive  weeks  immediately 
preceding  the  election,  in  a  newspaper  published  in  the  county  where 
the  election  is  to  be  held  and  in  such  other  manner  as  may  be  pre- 
scribed in  the  by-laws  for  the  publication  of  notice  of  the  annual 
meeting,  and  by  serving  upon  each  member,  either  personally  or  by 
r~.iji  ,':,-„„< ~^i  f0  him  at  his  l?s*  known  post-office  address,  a  copy 
of  such  notice  at  least  two  weeks  before  the  meeting. 

§  25.  Mode  of  conducting  special  election  of  directors. — Such 
meetings  shall  be  held  at  the  office  of  the  corporation,  or  if  it  has 
none,  at  the  place  in  this  State  where  its  principal  business  has  been 
transacted,  or  if  access  to  such  office  or  place  is  denied  or  can  not  be 
had,  at  some  other  place  in  the  city,  village  or  town  where  such 
office  or  place  is  or  was  located. 


§§  26-29]          THE   GENERAL    CORPORATION    LAW.  333 

At  such  meeting  the  members  attending  shall  constitute  a  quorum. 
They  may  elect  inspectors  of  election  and  directors  and  adopt  by- 
laws providing  for  future  annual  meetings  and  election  of  directors, 
if  the  corporation  has  no  such  by-laws,  and  transact  any  other  busi- 
ness which  may  be  transacted  at  an  annual  meeting  of  the  members 
of  the  corporation. 

§  26.  Qualification  of  voters  and  canvass  of  votes  at  special 
elections. — In  the  absence  at  such  meeting  of  the  books  of  the  cor- 
poration showing  who  are  members  thereof,  each  person,  before 
voting,  shall  present  his  sworn  statement  setting  forth  that  he  is  a 
member  of  the  corporation;  and  if  a  stock  corporation,  the  number 
of  shares  of  stock  owned  by  him  and  standing  in  his  name  on  the 
books  of  the  corporation,  and,  if  known  to  him,  the  whole  number  of 
shares  of  stock  of  the  corporation  outstanding.  On  filing  such  state- 
ment, he  may  vote  as  a  member  of  the  corporation;  and  if  a  stock 
corporation,  he  may  vote  on  the  shares  of  stock  appearing  in  such 
statement  to  be  owned  by  him  and  standing  in  his  name  on  the 
books  of  the  corporation. 

The  inspectors  shall  return  and  file  such  statements,  with  a  cer- 
tificate of  the  result  of  the  election,  verified  by  them,  in  the  office  of 
the  clerk  of  the  county  in  which  such  election  is  held,  and  the  per- 
sons so  elected  shall  be  the  directors  of  the  corporation. 

§  27.  Powers  of  Supreme  Court  respecting  elections. — The  Su- 
preme Court  shall,  upon  the  application  of  any  person  or  corporation 
aggrieved  by  or  complaining  of  any  election  of  any  corporation,  or 
any  proceeding,  act  or  matter  touching  the  same,  upon  notice  thereof 
to  the  adverse  party,  or  to  those  to  be  affected  thereby,  forthwith 
and  in  a  summary  way,  hear  the  affidavits,  proofs  and  allegations  of 
the  parties,  or  otherwise  inquire  into  the  matters  or  causes  of  com- 
plaint, and  establish  the  election  or  order  a  new  election,  or  make 
such  order  and  give  such  relief  as  right  and  justice  may  require. 

§  28.     Stay  of  proceedings  in  actions  collusively  brought. — If  an 

action  is  brought  against  a  corporation  by  the  procurement  or  default 
of  its  directors,  or  any  of  them,  to  enforce  any  claim  or  obligation 
declared  void  by  law,  or  to  which  the  corporation  has  a  valid  de- 
fense, and  such  action  is  in  the  interest  or  for  the  benefit  of  any 
director,  and  the  corporation  has  by  his  connivance  made  default  in 
such  action,  or  consented  to  the  validity  of  such  claim  or  obligation, 
any  member  of  the  corporation  may  apply  to  the  Supreme  Court, 
upon  affidavit,  setting  forth  the  facts,  for  a  stay  of  proceedings  in 
such  action,  and  on  proof  of  the  facts  in  such  further  manner  and 
upon  such  notice  as  the  court  may  direct,  it  may  stay  such  proceed- 
ings or  set  aside  and  vacate  the  same,  or  grant  such  other  relief  as 
may  seem  proper,  and  which  will  not  injuriously  affect  an  innocent 
party,  who,  without  notice  of  such  wrongdoing  and  for  a  valuable 
consideration,  has  acquired  rights  under  such  proceedings. 

§  29.  Quorum  of  directors  and  powers  of  majority. — The  affairs 
of  every  corporation  shall  be  managed  by  its  board  of  directors,  at 
least  one  of  whom  shall  be  a  resident  of  this  State.  Unless  other- 
wise provided  by  law  a  majority  of  the  board  of  directors  of  a 
corporation  at  a  meeting  duly  assembled  shall  be  necessary  to  con- 
stitute a  quorum  for  "the  transaction  of  business  and  the  act  of  a 


334  NEW   YORK    CORPORATIONS.  [§§  30-32 

majority  of  the  directors  present  at  a  meeting  at  which  a  quorum 
is  present  shall  be  the  act  of  the  board  of  directors.  The  members 
of  a  corporation  may  in  by-laws  fix  the  number  of  directors  neces- 
sary to  constitute  a  quorum  at  a  number  less  than  a  majority  of  the 
board,  but  at  least  equal  to  one-third  of  its  number.  Subject  to  the 
by-laws,  if  any  adopted  by  members  of  a  corporation,  the  directors 
may  make  necessary  by-laws  of  the  corporation. 

§  30.  Directors  as  trustees  in  case  of  dissolution. — Upon  the  dis- 
solution of  any  corporation,  its  directors,  unless  other  persons  shall 
be  appointed  by  the  legislature,  or  by  some  court  of  competent  juris- 
diction, shall  be  the  trustees  of  its  creditors,  stockholders  or  mem- 
bers, and  shall  have  full  power  to  settle  its  affairs,  collect  and  pay 
outstanding  debts,  and  divide  among  the  persons  entitled  thereto  the 
money  and  other  property  remaining  after  payment  of  debts  and 
necessary  expenses. 

Such  trustees  shall  have  authority  to  sue  for  and  recover  the 
debts  and  property  of  the  corporation,  by  their  name  as  such  trus- 
tees, and  shall  jointly  and  severally  be  personally  liable  to  its  credi- 
tors, stockholders  or  members,  to  the  extent  of  its  property  and 
effects  that  shall  come  into  their  hands. 

§  31.  Forfeiture  for  non-user. — If  any  corporation,  except  a  rail- 
road, turnpike,  plank-road  or  bridge  corporation,  shall  not  organize 
and  commence  the  transaction  of  its  business  or  undertake  the  dis- 
charge of  its  corporate  duties  within  two  years  from  the  date  of 
its  incorporation,  its  corporate  powers  shall  cease. 

§  32.  Extension  of  corporate  existence. — Any  domestic  corpora- 
tion at  any  time  before  the  expiration  thereof  may  extend  the  term 
of  its  existence  beyond  the  time  specified  in  its  original  certificate  of 
incorporation,  or  by  law,  or  in  any  certificate  of  extension  of  cor- 
porate existence,  by  the  consent  of  the  stockholders  owning  two- 
thirds  in  amount  of  its  capital  stock,  or  if  not  a  stock  corporation, 
by  the  consent  of  two-thirds  of  its  members,  which  consent  shall  be 
given  either  in  writing  or  by  vote  at  a  special  meeting  of  the  stock- 
holders called  for  that  purpose,  upon  the  same  notice  as  that  required 
for  the  annual  meetings  of  the  corporation;  and  a  certificate  under 
the  seal  of  the  corporation  that  such  consent  was  given  by  the 
stockholders  in  writing,  or  that  it  was  given  by  vote  at  a  meeting 
as  aforesaid,  shall  be  subscribed  and  acknowledged  by  the  president 
or  a  vice-president,  and  by  the  secretary  or  an  assistant  secretary  of 
the  corporation,  and  shall  be  filed  in  the  office  of  the  Secretary  of 
State,  and  shall  by  him  be  duly  recorded  and  indexed  in  a  book 
specially  provided  therefor,  and  a  certified  copy  of  such  certificate, 
with  a  certificate  of  the  Secretary  of  State  of  such  filing  and  record, 
or  a  duplicate  original  of  such  certificate,  shall  be  filed  and  similarly 
recorded  and  indexed  in  the  office  of  the  clerk  of  the  county  wherein 
the  corporation  has  its  principal  place  of  business,  and  shall  be 
noted  in  the  margin  of  the  record  of  the  original  certificates  of  such 
corporation,  if  any,  in  such  offices,  and  thereafter  the  term  of  the 
existence  of  such  corporation  shall  be  extended  as  designated  in 
such  certificate.  If  the  term  of  existence  of  any  domestic  corpora- 
tion shall  have  expired  and  it  shall  be  made  satisfactorily  to  appear 
to  the  Supreme  Court  that  such  corporation  was  legally  organized, 
pursuant  to  any  law  of  this  State,  and  that  it  shall  have  issued  its 


§  33]  THE   GENERAL    CORPORATION    LAW.  335 

bonds  payable  at  a  date  beyond  the  date  fixed  in  its  charter  or  cer- 
tificate of  incorporation  for  the  expiration  of  its  corporate  existence, 
and  such  bonds  shall  be  unmatured  and  unpaid,  the  Supreme  Court 
may,  upon  the  application  of  any  person  interested  and  upon  such 
notice  to  such  other  parties  as  the  court  may  require,  by  order,  au- 
thorize the  filing  and  recording  of  a  certificate  reviving  the  existence 
of  such  corporation,  upon  such  conditions  and  with  such  limita- 
tions as  such  order  shall  specify,  and  extending  such  corporate  ex- 
istence for  a  term  not  exceeding  the  term  for  which  it  was  originally 
incorporated.  Upon  filing  and  recording  such  certificate  in  the  same 
manner  as  certificates  of  extension  of  corporate  existence  duly  issued 
before  the  expiration  of  the  existence  of  a  domestic  corporation  is 
authorized  by  law  to  be  filed  and  recorded,  such  corporate  existence 
shall  be  revived  and  extended  in  pursuance  of  the  terms  of  such 
order,  but  such  revival  and  extension  shall  not  affect  any  litigation 
commenced  after  such  expiration  and  pending  at  the  time  of  such 
revival.  If  a  corporation  formed  under  or  subject  to  the  banking 
law,  such  certificate  shall  not  be  filed  or  recorded  unless  it  shall 
have  indorsed  thereon  the  written  approval  of  the  superintendent 
of  banks;  or,  if  an  insurance  corporation,  unless  it  shall  have  in- 
dorsed thereon  the  written  approval  of  the  superintendent  of  in- 
surance; and,  if  a  turn-pike  or  bridge  corporation,  it  shall  not  be 
filed  unless  it  shall  have  indorsed  thereon  or  annexed  thereto  a  cer- 
tified copy  of  a  resolution  of  the  board  of  supervisors  of  each  county 
in  which  such  turn-pike  or  bridge  is  located,  approving  of  and  au- 
thorizing such  extension.  If  all  the  stock  of  a  corporation  other 
than  a  corporation  formed  under  or  subject  to  the  banking  law,  or 
an  insurance  corporation,  or  a  turn-pike,  plank-road  or  bridge  cor- 
poration shall  be  lawfully  owned  by  another  stock  corporation  en- 
titled by  law  to  take  a  surrender  and  merger  thereof,  the  corporate 
existence  of  such  corporation  whose  stock  is  so  owned  may  be  ex- 
tended at  any  time  for  the  term  of  the  corporate  existence  of  the 
possessor  corporation,  by  filing  in  the  office  or  offices  in  which  the 
original  certificate  or  certificates  of  incorporation  of  the  first-men- 
tioned corporation  were  filed  a  certificate  of  such  extension  exe- 
cuted by  its  president  and  secretary  and  by  such  corporation  own- 
ing all  the  shares  of  its  capital  stock.  Every  corporation  extending 
its  corporate  existence  under  this  chapter  or  under  any  general  law 
of  the  State  shall  thereafter  be  subject  to  the  provisions  of  this  chap- 
ter and  of  such  general  law,  notwithstanding  any  special  provisions 
in  its  charter,  and  shall  thereafter  be  deemed  to  be  incorporated  under 
the  general  laws  of  the  State  relating  to  the  incorporation  of  a  cor- 
poration, for  the  purpose  of  carrying  on  the  business  in  which  it  is 
engaged,  and  shall  be  subject  to  the  provisions  of  such  law.  The 
certificate  of  incorporation  of  any  corporation  whose  duration  is 
limited  by  such  certificate  or  by  law,  may  require  that  the  consent 
of  stockholders  owning  a  greater  percentage  than  two-thirds  of  the 
stock  of  a  stock  corporation,  or  more  than  two-thirds  of  the  members 
of  a  non-stock  corporation,  shall  be  requisite  to  effect  an  extension 
of  corporate  existence  as  authorized  by  this  section. 

§  33.  Conflicting  corporate  laws. — If  in  any  corporate  law  there 
is  or  shall  be  any  provision  in  conflict  with  any  provisions  of  this 
chapter  or  of  the  stock  corporation  law,  the  provisions  so  conflicting 
shall  prevail,  and  the  provision  of  this  chapter  or  of  the  stock  cor- 
poration law  with  which  it  conflicts  shall  not  apply  in  such  a  case. 
If  in  any  such  law  there  is  or  shall  be  a  provision  relating  to  a  mat- 


336  NEW   YORK   CORPORATIONS.  [§§  36-40 

ter  embraced  in  this  chapter  or  in  the  stock  corporation  law,  but  not 
in  conflict  with  it,  such  provision  in  such  other  law  shall  be  deemed 
to  be  in  addition  to  the  provision  in  this  chapter  or  in  the  stock  cor- 
poration law  relating  to  the  same  subject-matter,  and  both  provi- 
sions shall,  in  such  case,  be  applicable. 

§  36.  Construction. — The  provisions  of  this  chapter,  and  of  the 
stock  corporation  law,  the  railroad  law,  the  transportation  corpora- 
tions law,  and  the  business  corporations  law,  so  far  as  they  are  sub- 
stantially the  same  as  those  of  laws  existing  on  April  30,  1891,  shall 
be  construed  as  a  continuation  of  such  laws  modified  or  amended 
according  to  the  language  employed  in  this  chapter,  or  in  the  stock 
corporation  law,  the  railroad  law,  the  transportation  corporations 
law,  or  the  business  corporations  law,  and  not  as  new  enactments. 

References  in  laws  not  repealed  to  provisions  of  laws  incorpor- 
ated into  the  general  laws  hereinbefore  enumerated  and  repealed, 
shall  be  construed  as  applying  to  the  provisions  so  incorporated. 

Nothing  in  this  chapter  or  in  the  other  general  laws  hereinbe- 
fore specified  shall  be  construed  to  amend  or  repeal  any  provision 
of  the  Criminal  or  Penal  Code  or  to  impair  any  right  or  liability 
which  any  existing  corporation,  its  officers,  directors,  stockholders 
or  creditors  may  have  or  be  subject  to  or  which  any  such  corporation, 
other  than  a  railroad  corporation,  had  or  was  subject  to  on  April  30, 
1891,  by  virtue  of  any  special  act  of  the  legislature  creating  such  cor- 
poration or  creating  or  defining  any  such  right  or  liability,  unless 
such  special  act  is  repealed  by  this  chapter. 

§  38.  When  notice  or  lapse  of  time  unnecessary. — Whenever  un- 
der the  provisions  of  any  of  the  corporate  laws  a  corporation  is  au- 
thorized to  take  any  action  after  notice  to  its  members  or  after  the 
lapse  of  a  prescribed  period  of  time,  such  action  may  be  taken  with- 
out notice  and  without  the  lapse  of  any  period  of  time,  if  such  action 
be  authorized  or  approved,  and  such  requirements  be  waived  in  writ- 
ing by  every  member  of  such  corporation,  or  by  his  attorney  there- 
unto authorized. 

§  39.  As  to  acts  of  directors. — Whenever,  under  the  provisions 
of  any  of  the  corporate  laws,  a  corporation  is  authorized  to  take  any 
action  by  the  agreement  or  action  of  its  directors,  managers  or  trus- 
tees, such  agreement  or  action  may  be  taken  by  such  directors,  regu- 
larly convened  as  a  board,  and  acting  by  a  majority  of  a  quorum, 
except  when  otherwise  expressly  required  by  law  or  the  by-laws  of 
the  corporation  and  any  such  agreement  shall  be  executed  in  behalf 
of  the  corporation  by  such  officers  as  shall  be  designated  by  the  board 
of  directors,  managers  or  trustees.  At  any  meeting  at  which  every 
member  of  the  board  of  directors  shall  be  present,  though  held  with- 
out notice,  any  business  may  be  transacted  which  might  have  been 
transacted  if  the  meeting  had  been  duly  called.  Except  when  other- 
wise required  by  law  or  the  by-laws  of  the  corporation,  special 
meetings  of  the  members  of  the  corporation  may  be  called  in  the 
same  manner  as  the  annual  meeting  thereof. 

§  40.  Alteration  and  repeal  of  charter. — The  charter  of  every  cor- 
poration shall  be  subject  to  alteration,  suspension  and  repeal,  in  the 
discretion  of  the  legislature. 

Note.  Sections  34  and  35  relating  to  the  repeal  of  certain  laws — 
enumerated  in  an  extended  schedule — and  Section  37  reviving  the  charter 
of  the  Baptist  Historical  Society,  are  omitted. 


THE  TRANSPORTATION  CORPORATIONS 

LAW. 


(Being  Chapter  40  of  the  General  Laws.) 

(Provisions  affecting  Navigation,  Gas,  Electric  Light,  Telegraph  and 
Telephone  Corporations.) 

ARTICLE  II.     Navigation  corporations.     (§§  10-13.) 

VI.     Gas  and  electric  light  corporations.     (§§  60-70.) 
VIII.     Telegraph   and   telephone   corporations.      (§§    100-105.) 


ARTICLE  II. 
NAVIGATION   CORPORATION. 

SECTION   10.  Formation  of  corporation. 

11.  Navigation   between   additional  ports. 

12.  Payment  of  capital  stock. 

13.  Ferries  unauthorized. 

§  10.  Formation  of  corporation. — Seven  or  more  persons  may 
become  a  corporation,  for  the  purpose  of  building  for  their  own  use, 
equipping,  furnishing,  fitting,  purchasing,  chartering,  navigating  or 
owning  steam,  sail  or  other  boats,  ships,  vessels  or  other  property 
to  be  used  in  any  lawful  business,  trade,  commerce  or  navigation 
upon  the  ocean,  or  any  seas,  sounds,  lakes,  rivers,  canals  or  other 
waterways,  and  for  the  carriage,  transportation  or  storing  of  lading, 
freight,  mails,  property  or  passengers  thereon  by  making,  signing, 
acknowledging  and  filing  a  certificate,  stating  the  name  of  the  cor- 
poration, the  specific  objects  for  which  it  is  formed,  the  waters  to  oe 
navigated,  and  in  case  of  ocean  steamers,  the  ports  between  which 
such  vessels  are  intended  to  be  navigated,  the  amount  of  its  capital 
stock,  which  shall  not  be  less  than  five  thousand  dollars,  nor  more 
than  four  million  dollars,  the  term  of  its  existence,  not  to  exceed 
fifty  years,  the  number  of  shares  of  which  the  capital  stock  shall 
consist,  the  number  of  directors  thereof,  not  less  than  five  nor  more 
than  thirteen,  the  names  of  the  directors  for  the  first  year,  and  the 
name  of  the  city,  village  or  town  and  county  in  which  its  principal 
office  is  to  be  situated,  the  number  of  shares  of  stock  which  each 
subscriber  of  the  certificate  agrees  to  take,  which  must  in  the  aggre- 
gate equal  ten  per  centum  of  the  capital  and  at  least  ten  per  centum 

337 


NEW   YORK   CORPORATIONS.  [§§  I  I-6o 

of  which  must  be  paid  in  cash.  Such  certificate  shall  have  attached 
thereto,  as  a  part  thereof,  the  affidavit  of  at  least  three  of  such 
directors,  to  the  effect  that  ten  per  centum  of  such  capital  stock  has 
been  in  good  faith  subscribed,  and  at  least  ten  per  centum  of  such 
subscription  has  been  paid  in  cash.  No  railroad  corporation  shall 
have,  own  or  hold  any  stock  in  any  such  corporation. 

§  ii.  Navigation  between  additional  ports. — Any  such  corpora- 
tion desiring  or  intending  to  navigate  boats,  ships  or  vessels,  upon 
any  other  waters,  or  in  case  of  ocean  steamers  between  any  other 
or  additional  ports  than  those  named  in  the  original  certificate,  may 
from  time  to  time,  file  a  further  certificate,  in  the  same  manner  as 
is  prescribed  by  law  for  the  filing  of  the  original  certificate,  in  which 
shall  be  stated  such  additional  waters  or  ports  upon  or  between 
which  such  corporation  desires  to  navigate  vessels,  and  thereafter 
such  corporation  may  navigate  its  vessels  upon  such  waters  and 
between  such  ports,  with  the  like  effect  as  if  they  had  been  named  in 
the  original  certificate. 

§  12.  Payment  of  capital  stock. — The  capital  stock  of  such  cor- 
poration shall  be  paid  in,  at  least  one-half  thereof,  within  one  year, 
and  the  remainder  within  two  years  from  its  incorporation,  or  the 
corporation  shall  be  dissolved.  Within  thirty  days  after  the  payment 
of  the  last  installment,  a  certificate  stating  that  the  whole  amount 
of  such  capital  stock  has  been  paid  in  shall  be  made,  signed  and 
sworn  to  by  the  president  and  a  majority  of  the  directors  of  the 
corporation,  and  filed  and  recorded  in  the  offices  where  the  original 
certificates  of  incorporation  were  filed. 

§  13.  Ferries  unauthorized. — This  article  shall  not  authorize  the 
formation  of  any  ferry  corporation  to  ply  between  the  city  of  New 
York  and  any  other  point. 


ARTICLE  VI. 
GAS  AND   ELECTRIC   LIGHT   CORPORATIONS. 

SECTION  60.  Incorporation. 

61.  Powers. 

62.  Inspector  of  gas  meters. 

63.  Deputy  inspectors. 

64.  Inspection  of  gas  meters. 

65.  Gas  and  electric  light  must  be  supplied  on  application. 

66.  Deposit  of  money  may  be  required. 

67.  Entry  of  buildings  to  meters  or  lights. 

68.  Refusal  or  neglect  to  pay  rent. 

69.  No  rent  for  meters  to  be  charged. 

70.  Price  of  gas. 

§  60.  Incorporation. — Three  or  more  persons  may  become  a  cor- 
poration for  manufacturing  and  supplying  gas  for  lighting  the  streets 
and  public  and  private  buildings  of  cities,  villages  and  towns  in  this 
state,  or  for  manufacturing  and  using  electricity  for  producing  light, 
heat  or  power,  and  in  lighting  streets,  avenues,  public  parks  and  places, 


§  6l]  TRANSPORTATION  CORPORATIONS  LAW.  339 

and  public  and  private  buildings  of  cities,  villages  and  towns  within 
this  State,  or  for  two  or  more  of  such  purposes,  by  making,  signing, 
acknowledging  and  filing  a  certificate  stating  the  name  of  the  cor- 
poration, its  objects,  the  amount  of  its  capital  stock,  the  term  of  its 
existence  not  to  exceed  fifty  years,  the  number  of  shares  of  which 
the  stock  shall  consist,  the  number  of  directors  not  less  than  three 
nor  more  than  thirteen,  the  names  and  places  of  residence  of  the 
directors  for  the  first  year,  and  the  names  of  the  towns,  villages, 
cities  and  counties  in  which  the  operations  of  the  corporation  are  to 
be  carried  on,  and  thereupon  the  persons  who  shall  have  signed  the 
same,  their  associates  and  successors  shall  be  a  corporation  by  the 
name  stated  in  the  certificate. 

§  61.     Powers. — Every   such    corporation    shall   have   the   follow- 
ing additional  powers: 

1.  If  incorporated   for  the   purpose   of   supplying   gas   for   light, 
to  manufacture  gas,  and  to  acquire  by  purchase  or  otherwise  natural 
gas,    and    to    sell    and    furnish    such    quantities    of    gas    as    may    be 
required   in   each   city,   town   and   village   named   in   its   certificate   of 
incorporation,   for   lighting  the   streets,   and   public   or  private   build- 
ings  or   for   other   purposes;   and   to   lay   conductors   for   conducting 
gas  through  the  streets,  lanes,  alleys,  squares  and  highways,  in  each 
such   city,  village   and   town,  with   the   consent  of  the  municipal  au- 
thorities   thereof,    and    under    such    reasonable    regulations    as    they 
may  prescribe;   and  such  municipal   authorities   shall  have   power   to 
exempt  any  such  corporation  from  taxation  on  their  personal  property 
for  a  period  not  exceeding  three  years  from  the  organization  of  the 
corporation.    Any  corporation  authorized  under  any  general  or  special 
law  of  this  state  to  manufacture  and  supply  gas  shall  have  the  like 
powers  and  privileges. 

2.  If  incorporated  for  the  purpose  of  using  electricity  for  light, 
heat  or  power,  to  carry  on  the  business  of  lighting  by  electricity  or 
using  it  for  heat  or  power  in  cities,  towns  and  villages  within  this 
State,  and  the  streets,  avenues,  public  parks  and  places  thereof,  and 
public  and   private  buildings   therein;   and   for   the   purposes  of  such 
business    to    generate    and    supply    electricity;    and    to    make,    sell    or 
lease  all  machines,  instruments,  apparatus  and  other  equipments  there- 
for,   and    to    lay,    erect    and    construct    suitable    wires    or    other    con- 
ductors, with  the  necessary  poles,  pipes  or  other  fixtures  in,  on,  over 
and  under  the  streets,  avenues,  public  parks  and  places  of  such  cities, 
towns   or   villages,   for    conducting   and    distributing   electricity,   with 
the  consent  of  the  municipal   authorities  thereof,  and  in   such  man- 
ner and  under  such  reasonable  regulations  as  they  may  prescribe. 

3.  Any  two  or  more  corporations  organized  under  this  article  or 
under   any   general   or   special   law   of   the   state   for   the   purpose   of 
carrying  on  any  business  which   a  corporation  organized  under  this 
article    might    carry    on,   may    consolidate    such    corporations    into    a 
single  corporation  by  complying  with  the  provisions  of  the  business 
corporations  law  relating  to  the   consolidation   of  business   corpora- 
tions. 

4.  Any   corporation   organized   under   this   article   or   under   any 
general  or   special   law  of  this   State  for  the  purpose  of  using  elec- 
tricity for  light,  heat  or  power  in  cities,  other  than  of  the  first-class, 
towns  or  villages  within  this   State,  may  have  and  acquire  the  fol- 
lowing additional  powers,  to  wit:  the  power  of  supplying  steam  to 
consumers  from  a  central  station  or  stations  through   pipes  laid  in 


34°  NEW   YORK    CORPORATIONS.  [§§  62-63 

the  public  streets  of  the  cities,  towns  and  villages  within  this  State, 
and  for  that  purpose  to  lay,  construct  and  maintain  suitable  pipes 
and  conduits  or  other  fixtures  in,  on  and  under  the  streets,  avenues, 
public  parks  and  places  of  such  cities,  towns  or  villages,  with  the 
consent  of  the  municipal  authorities  thereof,  and  under  such  reason- 
able regulations  as  they  may  prescribe.  For  the  purpose  of  acquir- 
ing the  powers  above  specified  any  such  corporation  may  make,  sign, 
acknowledge  and  file  in  the  same  manner  as  an  original  or  amended 
certificate  of  incorporation,  a  certificate  stating  that  such  corporation 
desires  and  intends  to  exercise  the  powers  hereinabove  specified. 
Upon  the  making,  signing,  acknowledging  and  filing  such  certificate, 
such  corporation  shall  have  and  acquire  for  the  purposes  specified  in 
such  certificate  all  the  rights,  privileges  and  powers,  and  be  subject 
to  all  the  restrictions  of  district  steam  corporations,  specified  in 
sections  thirteen,  fourteen  and  fifteen  of  the  business  corporations 
law,  being  chapter  six  hundred  and  ninety-one  of  the  laws  of  eigh- 
teen hundred  and  ninety-two. 

§  62.  Inspector  of  gas  meters. — The  Governor  shall  nominate 
and  by  and  with  the  consent  of  the  Senate  appoint  an  inspector  of 
gas  meters,  who  shall  have  an  office  in  The  City  of  New  York,  whose 
duty  it  shall  be,  when  required,  to  inspect,  examine,  prove  and  ascer- 
tain the  accuracy  of  any  and  all  gas  meters  used  or  intended  to  be 
used  for  measuring  or  ascertaining  the  quantity  of  illuminating  or 
fuel  gas  furnished  by  any  gas  corporation  in  this  State  including 
a  corporation  engaged  in  supplying  natural  gas  to  consumers,  to  or 
for  the  use  of  any  person  or  persons,  and,  when  found  to  be  or  made 
correct,  to  seal,  stamp  or  mark  all  such  meters,  and  each  of  them, 
with  some  suitable  device,  which  device  shall  be  recorded  in  the 
office  of  the  Secretary  of  State.  Such  inspector  shall  hold  his  office 
for  the  term  of  five  years  and  until  the  appointment  of  his  successor, 
but  may  be  removed  by  the  Governor  for  sufficient  cause.  He  shall 
receive  an  annual  salary  of  five  thousand  dollars,  to  be  paid  in  the 
first  instance  out  of  the  State  Treasury  on  the  warrant  of  the  Comp- 
troller, which  shall  be  charged  to  and  paid  into  the  State  Treasury  by 
the  several  gas  corporations  in  this  State,  in  amounts  proportionate 
to  the  amount  of  the  capital  stock  of  such  corporations  respectively, 
to  be  ascertained  and  assessed  by  the  Comptroller  of  the  State. 
If  any  such  corporation  shall  refuse  or  neglect  to  pay  into  the  State 
Treasury  the  amount  or  portion  of  such  salary  required  of  them 
respectively,  for  the  space  of  thirty  days  after  written  notice  given 
it  by  the  Comptroller  to  make  such  payment,  then  the  Comptroller 
may  maintain  an  action,  in  his  name  of  office,  against  any  such  de- 
linquent corporation  for  its  portion  or  amount  of  such  salary,  with 
interest  thereon  at  the  rate  of  ten  per  centum  per  annum  from  the 
time  when  such  notice  was  given  and  the  costs  of  the  action. 

§  63.  Deputy  inspectors,  employment  of  mechanics  and  expendi- 
tures.— The  inspector  of  gas  meters  shall  appoint  four  deputy  inspec- 
tors of  gas  meters  to  reside  in  the  borough  of  Brooklyn,  in  the  city 
of  New  York,  Albany,  Buffalo  and  Jamestown,  respectively,  to  hold 
office  during  his  pleasure,  and  who  shall  in  their  respective  places  of 
residence  discharge  such  duties  as  are  required  of  them  by  the  in- 
spector. Said  inspector  is  hereby  authorized  to  employ  not  exceed- 
ing ten  mechanics  to  assist  him  and  his  deputies  in  his  and  their 
work,  said  mechanics  to  be  paid  a  sum  not  exceeding  three  and  one- 
half  dollars  for  each  working  day.  Such  deputies  shall  receive  an 


§§  64-65]         TRANSPORTATION  CORPORATIONS  LAW.  34! 

annual  salary  of  fifteen  hundred  dollars  and  such  deputies  and  me- 
chanics shall  be  paid  in  the  same  manner  as  the  salary  of  the  in- 
spector. Said  inspector  is  hereby  authorized  to  incur  such  office  and 
other  expenditures  as  are  necessary  for  the  performance  of  his  duties 
imposed  by  law  and  for  the  purpose  of  providing  the  seals  to  be 
affixed  upon  meters  as  required  by  law;  and  the  said  office  and  other 
expenditures,  as  herein  authorized  excepting  the  salaries  of  deputy 
inspectors  and  pay  for  mechanics  shall  be  subject  to  the  audit  and 
approval  of  the  Comptroller  and  shall  not  exceed  the  sum  of  two 
thousand  dollars  per  annum,  and  be  paid  in  the  same  manner  as 
the  salary  of  the  inspector. 

§  64.  Inspection  of  gas  meters. — No  corporation  or  person  shall 
furnish  or  put  in  use  any  gas  meter,  which  shall  not  have  been  in- 
spected, proved  and  sealed  by  the  inspector,  except  during  such  time 
as  the  office  of  inspector  may  be  vacant,  or  such  inspector  after  re- 
quest made,  shall  refuse  or  neglect  to  prove  and  seal  the  meters 
furnished  for  that  purpose,  and  every  gas-light  corporation  shall 
provide  and  keep  in  and  upon  their  premises  a  suitable  and  proper 
apparatus,  to  be  approved  and  sealed  by  the  inspector  of  meters,  for 
testing  and  proving  the  accuracy  of  the  gas  meters  furnished  for 
use  by  it,  and  by  which  apparatus  every  meter  may  and  shall  be 
tested,  on  the  written  request  of  the  consumer,  to  whom  the  same 
shall  be  furnished,  and  in  his  presence  if  he  desire  it.  If  any  such 
meter  on  being  so  tested,  shall  be  found  defective  or  incorrect  to  the 
prejudice  or  injury  of  the  consumer,  the  necessary  removal,  inspec- 
tion correction  and  replacing  of  such  meter  shall  be  without  expense 
to  the  consumer,  but  in  all  other  cases  he  shall  pay  the  reasonable 
expenses  of  such  removal,  inspection  and  replacing;  and  in  case  any 
consumer  shall  not  be  satisfied  with  such  inspection  of  the  meter 
furnished  to  him,  and  shall  giv-e  to  the  corporation  written  notice  to 
that  effect,  he  may  have  such  meter  reinspected  by  the  state  inspector, 
if  he  require  it,  upon  the  same  terms  and  conditions  as  herein  pro- 
vided for  the  original  inspection  thereof. 

§  65.  Gas  and  electric  light  must  be  supplied  on  application. — 
Upon  the  application,  in  writing,  of  the  owner  or  occupant  of  any 
building  or  premises  within  one  hundred  feet  of  any  main  laid  down 
by  any  gas-light  corporation,  or  the  wires  of  any  electric-light  cor- 
poration, and  payment  by  him  of  all  money  due  from  him  to  the 
corporation,  the  corporation  shall  supply  gas  or  electric  light  as 
may  be  required  for  lighting  such  building  or  premises,  notwith- 
standing there  be  rent  or  compensation  in  arrear,  for  gas  or  electric 
light  supplied,  or  for  meter,  wire,  pipe  or  fittings,  furnished  to  a 
former  occupant  thereof,  unless  such  owner  or  occupant  shall  have 
undertaken  or  agreed  with  the  former  occupant  to  pay  or  exonerate 
him  from  the  payment  of  such  arrears,  and  shall  refuse  or  neglect  to 
pay  the  same;  and  if  for  the  space  of  ten  days  after  such  application, 
and  the  deposit  of  a  reasonable  sum  as  provided  in  the  next  section, 
if  required,  the  corporation  shall  refuse  or  neglect  to  supply  gas  or 
electric  light  as  required,  such  corporation  shall  forfeit  and  pay  to  the 
applicant  the  sum  of  ten  dollars  and  the  further  sum  of  five  dollars  for 
every  day  thereafter  during  which  such  refusal  or  neglect  shall  con- 
tinue; provided  that  no  such  corporation  shall  be  required  to  lay  ser- 
vice pipes  or  wires  for  the  purpose  of  supplying  gas  or  electric  light  to 
any  applicant  where  the  ground  in  which  such  pipe  or  wire  is  re- 
quired to  be  laid  shall  be  frozen,  or  shall  otherwise  present  serious 


342  NEW   YORK    CORPORATIONS.  [  §  §  66-69 

obstacles  to  laying  the  same;  nor  unless  the  applicant,  if  required, 
shall  deposit  in  advance  with  the  corporation  a  sum  of  money  suffi- 
cient to  pay  the  cost  of  his  portion  of  the  pipe  or  wire  required  to 
be  laid,  and  the  expense  of  laying  such  portion. 

§  66.  Deposit  of  money  may  be  required. — Every  gas  light  and 
electric  light  corporation  may  require  every  person  to  which  such 
corporation  shall  supply  gas  or  electric  light  for  lighting  any  build- 
ing, room  or  premises  to  deposit  with  such  corporation  a  reasonable 
sum  of  money  according  to  the  number  and  size  of  lights  used  or 
required,  or  proposed  to  be  used  for  two  calendar  months,  by  such 
person,  and  the  quantity  of  gas  and  electric  light  necessary  to  sup- 
ply the  same  as  security  for  the  payment  of  the  gas  and  electric  light 
rent  or  compensation  for  gas  consumed,  or  rent  of  pipe  or  wire  and 
fixtures,  to  become  due  to  the  corporation,  but  every  corporation 
shall  allow  and  pay  to  every  such  depositor  legal  interest  on  the 
sum  deposited  for  the  time  his  deposit  shall  remain  with  the  cor- 
poration. 

§  67.  Buildings  may  be  entered  for  the  examination  of  meters, 
lights,  and-so-forth. — Any  officer  or  other  agent  of  any  gas  light  or 
electric  light  corporation,  for  that  purpose  duly  appointed  and  au- 
thorized by  the  corporation,  may,  at  all  reasonable  times,  upon  ex- 
hibiting a  written  authority,  signed  by  the  president  and  secretary 
of  the  corporation,  enter  any  dwelling,  store,  building,  room  or 
place  lighted  with  gas  or  electric  light  supplied  by  such  corporation, 
for  the  purpose  of  inspecting  and  examining  the  meters,  pipes,  fit- 
tings, wires  and  works  for  supplying  or  regulating  the  supply  of 
gas  or  electric  light  and  of  ascertaining  the  quantity  of  gas  or  electric 
light  consumed  or  supplied,  and  if  any  person  shall,  at  any  time, 
directly  or  indirectly,  prevent  or  hinder  any  such  officer  or  agent 
from  so  entering  any  such  premises,  or  from  making  such  inspection 
or  examination  at  any  reasonable  time,  he  shall,  for  every  such 
offense  forfeit  to  the  corporation  twenty-five  dollars. 

§  68.  Refusal  or  neglect  to  pay  rent. — If  any  person  supplied 
with  gas  or  electric  light  by  any  such  corporation  shall  neglect  or 
refuse  to  pay  the  rent  or  remuneration  due  for  the  same  or  for 
the  wires,  pipes  or  fittings  let  by  the  corporation,  for  supplying  or 
using  such  gas  or  electric  light,  or  for  ascertaining  the  quantity  con- 
sumed or  used  as  required  by  his  contract  with  the  corporation,  or 
shall  refuse  or  neglect,  after  being  required  so  to  do,  to  make  the 
deposit  required,  such  corporation  may  prevent  the  gas  or  electric 
light  from  entering  the  premises  of  such  person;  and  their  officers, 
agents  or  workmen  may  enter  into  or  upon  any  such  premises  be- 
tween the  hours  of  eight  o'clock  in  the  forenoon  and  six  o'clock  in 
the  afternoon,  and  separate  and  carry  away  any  meter,  pipe,  fittings, 
wires  or  other  property  of  the  corporation,  and  may  disconnect  any 
meter,  pipe,  fittings,  wires  or  other  works  whether  the  property  of 
the  corporation  or  not,  from  the  mains,  pipes  or  wires  of  the  cor- 
poration. 

§  69.  No  rent  for  meters  to  be  charged. — No  gas-light  corpora- 
tion in  this  State,  shall  charge  or  collect  rent  on  its  gas  meters, 
either  in  a  direct  or  indirect  manner,  and  any  person,  party  or  cor- 
poration violating  this  provision  shall  be  liable  to  a  penalty  of  fifty 


§§  7OIOO]        TRANSPORTATION    CORPORATIONS   LAW.  343 

dollars  for  each  offense,  to  be  sued  for  and  recovered  in  the  cor- 
porate name  of  the  city  or  village  where  the  violation  occurs,  in 
any  court  having  jurisdiction,  and  when  collected  to  be  paid  into 
the  treasury  of  such  city  or  village  and  to  constitute  a  part  of  the 
contingent  or  general  fund  thereof. 

§  70.  Price  of  gas. — In  any  city  in  this  State  having  a  popula- 
tion of  eight  hundred  thousand  or  over,  no  corporation  or  person 
shall  charge  for  illuminating  gas  a  sum  to  exceed  one  dollar  and 
twenty-five  cents  per  thousand  feet,  and  such  gas  shall  have  an 
illuminating  power  of  not  less  than  twenty  sperm  candles,  of  six  to 
the  pound,  and  burning  at  the  rate  of  one  hundred  and  twenty  grains 
of  spermaceti  per  hour,  tested  at  a  distance  of  not  less  than  one  mile 
from  the  place  of  manufacture,  by  a  burner  consuming  five  cubic 
feet  of  gas  per  hour,  and  shall  comply  with  the  standard  of  purity 
now  or  hereafter  established  by  law;  but  in  any  district  or  ward  of 
any  city  containing  over  one  million  inhabitants,  which  district  or 
ward  is  separated  from  the  main  portion  thereof  by  a  stream  or 
other  natural  boundary,  any  gas-light  corporation  may  charge  a 
price  not  to  exceed  one  dollar  and  sixty  cents  per  thousand  cubic 
feet,  but  such  corporation  shall  not  charge  a  greater  price  in  the 
city  where  its  main  works  shall  be  situated  than  in  such  district  or 
ward. 

§  7oa.  Acquisition  of  real  estate,  etc.,  authorized. — Any  electric 
light  company  in  any  town  or  village  in  this  State  having  a  contract 
with  any  town  or  incorporated  village  for  the  lighting  of  streets, 
parks,  squares  or  public  buildings  in  any  town  or  village,  shall  have 
the  right  and  is  hereby  vested  with  the  power  and  authority  to  ac- 
quire such  real  estate  as  may  be  necessary  for  the  purposes  of  its 
incorporation,  or  acquire  the  right  of  way  through  any  property  in 
the  same  manner  as  is  now  vested  by  law  in  water-works  companies. 
Such  real  estate  or  right  of  way  to  be  acquired  in  the  manner  and 
form  prescribed  by  the  general  condemnation  law  of  this  State. 


ARTICLE  VIII. 
TELEGRAPH  AND  TELEPHONE  CORPORATIONS. 

SECTION  100.  Incorporation. 

101.  Extension  of  lines. 

102.  Construction  of  lines. 

103.  Transmission  of  dispatches. 

104.  Consolidation  of  corporations. 

105.  Special  policemen. 

§  100.  Incorporation. — Seven  or  more  persons  may  become  a 
corporation  for  the  purpose  of  constructing,  owning,  using  and 
maintaining  a  line  or  lines  of  electric  telegraph  or  telephone,  wholly 
within  or  partly  beyond  the  limits  of  this  State,  or  for  the  purpose  of 
owning  any  interest  in  any  such  line  or  lines,  or  any  grants  there- 
for by  executing,  acknowledging  and  filing  a  certificate,  stating  the 
name  of  the  corporation;  its  general  route  and  the  points  to  be 


344  NEW   YORK   CORPORATIONS.  [§§  IOI-IO4 

connected;  its  capital  stock;  the  number  of  shares  into  which  it  is 
to  be  divided;  the  term  of  its  existence;  the  number  of  its  directors 
not  less  than  seven;  the  names  and  residence  of  the  directors  for 
the  first  year,  and  the  post-office  address  of  the  subscribers  and  the 
number  of  shares  which  each  agrees  to  take  in  such  corporation. 

§  101.  Extension  of  lines. — Any  such  corporation  may  construct, 
own,  use  and  maintain  any  line  of  electric  telegraph  or  telephone, 
not  described  in  its  original  certificate  of  incorporation,  whether 
wholly  within  or  wholly  or  partly  beyond  the  limits  of  this  State, 
and  may  join  with  any  other  corporation  in  constructing,  leasing, 
owning,  using  and  maintaining  such  line,  or  hold  or  own  any  interest 
therein,  or  become  lessees  thereof,  upon  filing  in  the  same  manner 
as  the  original  certificate  is  required  to  be  filed  an  amended  certifi- 
cate, executed  and  acknowledged  by  at  least  two-thirds  of  the  direc- 
tors of  such  corporation,  describing  the  general  route  of  such  line  or 
lines,  and  designating  the  extreme  points  connected  thereby,  and 
upon  procuring  the  written  consent  of  the  persons  owning  at  least 
two-thirds  of  the  capital  stock  of  such  corporation,  and  such  amended 
certificate  shall  not  be  filed  until  there  is  indorsed  thereon  or  an- 
nexed thereto  an  affidavit  made  by  at  least  three  of  the  directors  of 
the  corporation  that  such  consent  has  been  obtained,  which  affidavit 
shall  be  filed  with  and  be  a  part  of  such  certificate. 

§  102.  Construction  of  lines. — Such  corporation  may  erect,  con- 
struct and  maintain  the  necessary  fixtures  for  its  lines  upon,  over 
or  under  any  of  the  public  roads,  streets  and  highways;  and  through, 
across  or  under  any  of  the  waters  within  the  limits  of  this  State,  and 
upon,  through  or  over  any  other  land,  subject  to  the  right  of  the 
owners  thereof  to  full  compensation  for  the  same.  If  any  such  cor- 
poration can  not  agree  with  such  owner  or  owners  upon  the  com- 
pensation to  be  paid  therefor,  such  compensation  shall  be  ascertained 
in  the  manner  provided  in  the  condemnation  law. 

§  103.  Transmission  of  despatches. — Every  such  corporation 
shall  receive  despatches  from  and  for  other  telegraph  or  telephone 
lines  or  corporations,  and  from  and  for  any  individual,  and  on  pay- 
ment of  the  usual  charges  by  individuals  for  transmitting  despatches 
as  established  by  the  rules  and  regulations  of  such  corporation,  trans- 
mit the  same  with  impartiality  and  good  faith  and  in  the  order  in 
which  they  are  received,  and  if  it  neglects  or  refuses  so  to  do,  it 
shall  pay  one  hundred  dollars  for  every  such  refusal  or  neglect  to 
the  person  or  persons  sending  or  desiring  to  send  any  such  despatch 
and  entitled  to  have  the  same  so  transmitted,  but  arrangements  may 
be  made  with  the  proprietors  or  publishers  of  newspapers  for  the 
transmission  for  publication  of  intelligence  of  general  and  public  in- 
terest out  of  its  regular  order. 

§  104.  Consolidation  of  corporations. — Any  corporation  organ- 
ized under  this  article  may  lease,  sell  or  convey  its  property,  rights, 
privileges  and  franchises,  or  any  interest  therein,  or  any  part  thereof 
to  any  telegraph  or  telephone  corporation  organized  under  or  created 
by  the  laws  of  this  or  any  other  state,  and  may  acquire  by  pur- 
chase, lease  or  conveyance  the  property  rights,  privileges  and  fran- 
chises, or  any  interest  therein  or  part  thereof  of  any  such  corpora- 
tion, and  may  make  payments  therefor  in  its  own  stock,  money  or 
property,  or  receive  payment  therefor  in  the  stock,  money  or  prop- 


§§  IO5-IO5a]       TRANSPORTATION  CORPORATIONS  LAW  3,]  5 

erty  of  the  corporation  to  which  the  same  may  be  sold,  leased  or 
conveyed,  but  no  such  lease,  sale,  purchase  or  conveyance  shall  be 
valid  until  it  shall  have  been  ratified  and  approved  by  a  three-fifths 
vote  of  its  board  of  directors  or  trustees,  and  by  the  vote  or  written 
consent  of  stockholders  owning  at  least  three-fifths  of  the  capital 
stock  given  at  a  meeting  of  all  the  stockholders  duly  called  for  that 
purpose. 

§  105.  Special  policemen. — The  police  department  or  board  of 
police  of  any  city  may,  in  addition  to  the  police  force  now  authorized 
by  law,  appoint  a  number  of  persons,  not  exceeding  two  hundred, 
who  may  be  designated  by  any  corporation  operating  a  system  of 
signaling  by  telegraph  to  a  central  office  for  police  assistance,  to 
act  as  special  patrolmen  in  connection  with  such  telegraphic  system. 
And  the  person  so  appointed  shall,  in  and  about  such  service,  have 
all  the  powers  possessed  by  the  members  of  the  regular  force,  ex- 
cept as  may  be  limited  by  and  subject  to  the  supervision  and  con- 
trol of  the  police  department  or  board  of  police  of  such  city.  No 
person  shall  be  appointed  such  special  policeman  who  does  not  pos- 
sess the  qualifications  required  by  such  police  department  or  board 
of  police  for  such  special  service;  and  persons  so  appointed  shall  be 
subject,  in  case  of  emergency,  to  do  duty  as  part  of  the  regular  police 
force  of  the  city.  The  police  department  or  board  of  police  shall 
have  power  to  revoke  any  such  appointment  at  any  time,  and  every 
person  appointed  shall  wear  a  badge  and  uniform,  to  be  furnished  by 
such  corporation  and  approved  by  the  police  department  or  board 
of  police,  such  uniform  shall  be  designated  at  the  time  of  the  first 
appointment  and  shall  be  the  permanent  uniform  to  be  worn  by 
such  special  police,  and  the  pay  of  such  special  patrolmen  and  all 
expenses  connected  with  their  service  shall  be  wholly  paid  by  such 
corporation,  and  no  expense  or  liability  shall  at  any  time  be  incurred 
or  paid  by  the  police  department  or  board  of  police  of  any  city, 
for  or  by  reason  of  the  services  of  such  persons  so  appointed. 

§  iosa.  No  prescriptive  right  acquired  by  attachment  of  wires. 
— Whenever  any  wire  or  cable  used  for  any  telegraph,  telephone, 
electric  light  or  other  electric  purpose,  or  for  the  purpose  of  com- 
munication otherwise  than  by  the  aid  of  electricity,  is  or  shall  be 
attached  to,  or  does  or  shall  extend  upon  or  over  any  building  or  land, 
no  lapse  of  time  whatever  shall  raise  a  presumption  of  any  grant  of,  or 
justify  a  prescription  of  any  perpetual  right,  to  such  attachment  or 
extension. 


FILING  AND  RECORDING  FEES. 


FEES  TO  SECRETARY  OF  STATE. 
(Executive  Law,  L.  1892,  Ch.  683,  §  26.) 

2.  Searching  the  records  in  his  office  for  any  one  year  and  for 
every  other  year  in  which  such  search  is  made,  six  cents; 

3.  For  a  copy  of  any  paper  or  record  not  required  to  be  certified 
or  otherwise  authenticated  by  him,  ten  cents  per  folio; 

4.  For   a    certified    or    exemplified    copy    of   any   law,    record    or 
paper,  fifteen  cents  per  folio,  and  one  dollar  additional  for  a  certificate 
under  seal  of  his  office  (L.  1904,  Ch.  36); 

5.  For  a  certificate  under  the  great  seal  of  the  State,  one  dollar; 

6.  For  recording  a  certificate,  notice  or  other  paper  required  to 
be    recorded,    except    as    otherwise   provided    by   this    section,    fifteen 
cents  per  folio; 

7.  For  a  certificate  of  the  official  character  of  a   commissioner 
of  deeds  residing  in  another  State  or  a  foreign  country,  twenty-five 
cents,  and  for  every  other  certificate  under  the  seal  of  his  office,  one 
dollar; 

12.  For  filing  and  recording  the  original  certificate  of  incorpora- 
tion of  a  railroad  corporation  for  the  construction  of  a  railroad  in  a 
foreign    country,   fifty   dollars;    for   filing   the   original    certificates   of 
every  other   railroad   corporation,   twenty-five   dollars;   for   filing  the 
original   certificate   of  any   other   stock   corporation,   ten   dollars;   for 
filing   any    original    certificate    of   incorporation    drawn    under    article 
two  of  the  membership  corporations  law,  ten  dollars; 

13.  For   filing   the   certificate   of   a   foreign    corporation    desiring 
to  do  business  in  the  state,  ten  dollars. 


FEES  TO   COUNTY  CLERKS. 

(Code  Civil  Procedure,  §3304.) 

A  county  clerk  is  entitled,  for  the  services  specified  in  this  sec- 
tion, except  where  another  fee  is  allowed  therefor  by  special  statutory 
provision,  to  the  following  fees  to  be  paid  in  advance;  *  *  * 

For  a  copy  of  an  order,  record,  or  other  paper,  entered  or  filed 
in  his  office,  eight  cents  for  each  folio.  *  *  * 

For  recording  any  instrument,  which  must  or  may  legally  be  re- 
corded by  him,  ten  cents  for  each  folio.  *  *  * 

For  riling  any  paper  required  by  law  to  be  filed  in  his  office,  other 
than  as  expressly  provided  for  in  this  section,  six  cents. 

346 


FILING  AND  RECORDING  FEES. 
TABLE  OF  FEES 


347 


Payable  to  state  and  county  officials  in  connection  with  corporate 
proceedings,  as  listed  below,  requiring  filings,  recordings  or  certifica- 
tions. 

Fees  may  be  paid  in  cash,  by  money  order,  New  York  Exchange 
or  certified  check. 


Incorporation. 

State   Treasurer. 
Sec'y   of   State. 


County    Clerk. 


Consolidation. 


Organization  tax  of  one-twentieth  of  one 
per  cent,  on  authorized  capitalization. 

Filing  charter,  $10;  recording,  15  cents  per 
folio;  certified  copies,  15  cents  per  folio  and 

ti    additional    for   office    seal    of    Secretary   of 
tate;    exemplification    under    Great    Seal    of 
State,    $i    additional.      (See    Note    at    end    of 
Table.) 

Filing  fee,  6  cents  for  each  instrument;  re- 
cording fee,  10  cents  per  folio;  certified  copies, 
8  cents  per  folio. 


Fees  same  as  on  original  incorporation, 
except  that  organization  tax  is  paid  only  on 
capitalization  in  excess  of  the  aggregate  capi- 
tal of  the  constituent  corporations. 


Amendments  to  Charter. 


State   Treasurer. 


Sec'y   of   State. 


County    Clerk. 
Comptroller. 


No  fees  except  on  amendments  increasing 
capital  stock  when  one-twentieth  of  one  per 
cent,  must  be  paid  on  amount  of  increase. 

No  filing  fee;  other  fees  same  as  for 
original  certificate  except  for  amendment 
changing  corporate  name,  which  see. 

Same  as  for  original  certificate,  except  for 
change  of  corporate  name,  which  see. 

Amendments  decreasing  capital  stock  re- 
quire Comptroller's  certificate.  Fee,  $i. 


Change  of  Corporate  Name. 

Sec'y  of  State.  Certificate  that  name  does  not  conflict,  $i; 

for  recording  affidavit  of  publication  of  order, 
15  cents  per  folio.  Copy  of  petition  and  notice 
of  motion  must  be  filed  to  reserve  proposed 
name  pending  the  proceedings,  as  must  also 
copy  of  court  order,  certified  by  county  clerk, 
but  no  fees  are  payable  therefor. 

County  Clerk.  Fee  for  filing  order,  6  cents;  10  cents  per 

folio  for  recording  same  and  8  cents  for  cer- 
tified copy;  also  6  cents  for  filing  affidavit  of 
publication  of  order  and  10  cents  per  folio  for 
recording  same. 


348  NEW   YORK   CORPORATIONS. 

Payment  of  One-Half  Capital  Stock. 

Sec'y  of  State.  Fee  for  recording  certificate,  15  cents  per 

folio. 

County  Clerk.  Fee  for  filing  certificate,  6  cents;  record- 

ing same,  10  cents  per  folio. 

Merger  of  Corporations. 

Sec'y   of   State.  Fee  for  recording  certificate,  15  cents  per 

folio. 

Reports, — Annual,  Comptroller's,  Local  Tax. 

No  fees. 
Report,  Inspectors  of  Election. 

County    Clerk.  6  cents  for  filing. 

Voluntary  Dissolution. 

Sec'y  of  State.  No  filing  fees.  Duplicate  certificates  of 

filing,  $i  each. 

County  Clerk.  Fee  for  filing  Secretary  of  State's  certifi- 

cate of  filing,  6  cents. 

Dissolution  by  Incorporators. 

Sec'y    of    State.  Certificate  must  be   filed  but  no  fees  are 

paid. 
County    Clerk.  Filing  fee,  6  cents;  recording,  10  cents  per 

folio. 

Foreign  Corporations,  Admission  of. 

Sec'y    of    State.  Filing  fee,  $10;  certificate  of  authority,  $i. 

(Revocation  and  designation  of  new  agent,  or 
notice  of  change  of  agent's  office  must  be  filed 
in  office  of  Secretary  of  State,  but  no  fees  are 
paid.) 

Consent  to  Mortgage. 

County    Clerk.  Fee    for    filing    stockholders'    consent,    6 

cents;  recording,  10  cents  per  folio. 

NOTE. — Copies  of  charters  certified  by  the  Secretary  of  State  must 
be  authenticated  by  the  office  seal.  Exemplified  copies  are  in  addi- 
tion impressed  with  the  Great  Seal  of  State.  In  any  case  the  fees 
are  15  cents  for  each  folio — 100  words: — contained  in  the  instrument, 
and  $i  for  each  seal  affixed.  For  instance  a  charter  containing  10 
folios  would  cost,  if  certified,  $2.50;  if  exemplified,  $3.50.  Exemplified 
copies  are  usually  required  for  filing  in  other  states  or  in  foreign 
countries. 


THE  TAX  LAW. 


Laws  of  1896,  Chapter  908,  as  Amended  to  January  ist,  1906. 
(Being  Chapter  24  of  the  General  Laws.) 

(Provisions  relating  specially  to  corporations.) 


LOCAL  TAX. 


ARTICLE  I. 
TAXABLE  PROPERTY  AND  PLACE  OF  TAXATION. 

SECTION     4.  Exemption  from  taxation. 

7.  When  property  of  non-residents  is  taxable. 

11.  Place  of  taxation  of  property  of  corporations. 

12.  Taxation  of  corporate  stock. 

§  4.     Exemption  from  Taxation. 

16.  The  owner  or  holder  of  stock  in  an  incorporated  company 
liable  to  taxation  on  its  capital,  shall  not  be  taxed  as  an  individual  for 
such  stock. 

§  7.  When  property  of  non-residents  is  taxable. — Non-residents 
of  the  State  doing  business  in  the  State,  either  as -principals  or  part- 
ners, shall  be  taxed  on  the  capital  invested  in  such  business,  as  per- 
sonal property,  at  the  place  where  such  business  is  carried  on,  to  the 
same  extent  as  if  they  were  residents  of  the  State. 

§  ii.  Place  of  taxation  of  property  of  corporations. — The  real 
estate  of  all  incorporated  companies  liable  to  taxation,  shall  .be 
assessed  in  the  tax  district  in  which  the  same  shall  lie,  in  the  same 
manner  as  the  real  estate  of  individuals.  All  the  personal  estate  of 
every  incorporated  company  liable  to  taxation  on  its  capital  shall 
be  assessed  in  the  tax  district  where  the  principal  office  or  place  for 
transacting  the  financial  concerns  of  the  company  shall  be,  or  if  such 
company  have  no  principal  office,  or  place  for  transacting  its  financial 

349 


35O  NEW    YORK    CORPORATIONS. 

concerns,  then  in  the  tax  district  where  the  operations  of  such  com- 
pany shall  be  carried  on.  In  the  case  of  toll  bridges,  the  company 
owning  such  bridge  shall  be  assessed  in  the  tax  district  in  which  the 
tolls  are  collected;  and  where  the  tolls  of  any  bridge,  turn-pike,  or 
canal  company  are  collected  in  several  tax  districts,  the  company 
shall  be  assessed  in  the  tax  district  in  which  the  treasurer  or  other 
officer  authorized  to  pay  the  last  preceding  dividend  resides. 

§  12.  Taxation  of  corporate  stock. — The  capital  stock  of  every 
company  liable  to  taxation,  except  such  part  of  it  as  shall  have  been 
excepted  in  the  assessment-roll  or  shall  be  exempt  by  law,  together 
with  its  surplus  profits  or  reserve  funds  exceeding  ten  per  centum 
of  its  capital,  after  deducting  the  assessed  value  of  its  real  estate, 
and  all  shares  of  stock  in  other  corporations  actually  owned  by 
such  company  which  are  taxable  upon  their  capital  stock  under  the 
laws  of  this  State,  shall  be  assessed  at  its  actual  value. 


ARTICLE  II. 
MODE  OF  ASSESSMENT. 

SECTION  27.     Reports  of  corporations. 

28.     Penalty  for  omission  to  make  statement. 
31.     Corporations,  how  assessed. 

§  27.  Reports  of  corporations. — The  president  or  other  proper 
officer  of  every  moneyed  or  stock  corporation  deriving  an  income  or 
profit  from  its  capital  or  otherwise  shall,  on  or  before  June  fifteenth, 
deliver  to  one  of  the  assessors  of  the  tax  district  in  which  the  com- 
pany is  liable  to  be  taxed  and,  if  such  tax  district  is  in  a  county 
embracing  a  portion  of  the  forest  preserve,  to  the  comptroller  of  the 
state,  a  written  statement  specifying: 

1.  The  real  property,  if  any,  owned  by   such   company,  the  tax 
district  in  which  the  same  is  situated,  and,  unless  a  railroad  corpora- 
tion, the  sums  actually  paid   therefor. 

2.  The  capital  stock  actually  paid  in  and  secured  to  be  paid  in 
excepting  therefrom  the  sums  paid  for  real  property  and  the  amount 
of  such  capital  stock  held  by  the  state  and  by  any  incorporated  literary 
or  charitable  institution,  and 

3.  The  tax  district  in  which  the  principal  office  of  the  company 
is  situated   or   in    case   it   has  no   principal   office,   the  tax   district  in 
which  its  operations  are  carried  on. 

Such  statement  shall  be  verified  by  the  officer  making  the  same 
to  the  effect  that  it  is  in  all  respects  just  and  true.  If  such  state- 
ment is  not  made  within  twenty  days  after  the  fifteenth  day  of  June, 
or  is  insufficient,  evasive  or  defective,  the  assessors  may  compel  the 
corporation  to  make  a  proper  statement  by  mandamus. 

§  28.  Penalty  for  omission  to  make  statement. — In  case  of  neglect 
to  furnish  such  statements  within  thirty  days  after  the  time  above 
provided,  the  company  so  neglecting  shall  forfeit  to  the  people  of 
this  State  for  each  statement  so  omitted  to  be  furnished,  the  sum  of 
two  hundred  and  fifty  dollars,  and  it  shall  be  the  duty  of  the  Attorney 
General  to  prosecute  for  such  penalty  upon  information  which  shall 


THE  TAX    LAW.  351 

be  furnished  him  by  the  comptroller.  Upon  such  statement  being 
furnished  and  the  costs  of  the  suit  being  paid,  the  comptroller,  if  he 
shall  be  satisfied  that  such  omission  was  not  willful,  may,  in  his  dis- 
cretion, discontinue  such  suit. 

§  31.  Corporations,  how  assessed. — The  assessors  shall  assess 
corporations  liable  to  taxation  in  their  respective  tax  districts  upon 
their  assessment  rolls  in  the  following  manner: 

1.  In  the  first  column  the  name  of  each  corporation,  and  under 
its  name  the  amount  of  its  capital  stock  paid  in  and  secured  to  be 
paid  in;  the  amount  paid  by  it  for  real  property  then   owned  by  it 
wherever  situated;  the  amount  of  all  surplus  profits  or  reserve  funds 
exceeding  ten  per  centum  of  their  capital,  after  deducting  therefrom 
the  amount  of  said  real  property  and  the  amount  of  its  stock,  if  any, 
belonging  to    the   state   and   to   incorporated    literary   and    charitable 
institutions. 

2.  In  the  second  column  the   quantity  of  real  property   except 
special  franchises  owned  by  such  corporation  and  situated  within  their 
tax  district. 

3.  In  the  third  column  the  actual  value  of  such  real  property  ex- 
cept special  franchises. 

4.  In  the  fourth   column  the   amount   of  the   capital   stock  paid 
in  and  secured  to  be  paid  in,  and  of  all  of  such  surplus  profits  or  re- 
serve funds  as  aforesaid,  after  deducting  the  sums  paid  out  for  all  the 
real  estate  of  the  company,  wherever  the  same  may  be  situated  and 
then  belonging  to  it,  and  the  amount  of  stock,  if  any,  belonging  to  the 
people  of  the  state  and  to  incorporated  literary  and  charitable  insti- 
tutions. 

5.  In  the  fifth  column  the  value  of  any  special  franchise  owned 
by  it  as  fixed  by  the  state  board  of  tax  commissioners. 


STATE  TAX. 


ARTICLE  IX. 
CORPORATION  TAX. 

SECTION  180.  Organization  tax. 

181.  License  tax  on  foreign  corporations. 

182.  Franchise  tax  on  corporations. 

183.  Certain    corporations    exempted    from    tax    on    capital 

stock  tax. 

18.4.  Additional  franchise  tax  on  transportation  and  trans- 
mission corporations  and  associations. 

186.  Franchise  tax  on  water-works  companies,  gas  com- 
panies, electric  or  steam  heating,  lighting  and  power 
companies. 

189.  Report  of  corporations. 

190.  Value  of  stock  to  be  appraised. 

191.  Further  requirements  as  to  reports  of  corporations. 

192.  Powers  of  comptroller  to  examine  into  affairs  of  cor- 

porations. 

193.  Notice  of  statement  of  tax;  interest. 


352  NEW   YORK   CORPORATIONS. 

SECTION  194.  Payment  of  tax  and  penalty  for  failure. 

195.  Revision  and  readjustment  of  accounts  by  comptroller. 

196.  Review  of  determination  of  comptroller  by  certiorari. 

197.  Regulations  as  to  such  writ  of  certiorari. 

198.  Warrant  for  the  collection  of  taxes. 

199.  Information  of  delinquents. 

200.  Action   for   recovery  of  taxes;   forfeiture  of  charter  of 

delinquent  corporations. 

202.  Exemptions  from  other  state  taxation. 

203.  Application    of   tax. 

§  180.  Organization  tax. — Every  stock  corporation  incorporated 
under  any  law  of  this  State  shall  pay  to  the  State  Treasurer  a  tax 
of  one-twentieth  of  one  per  centum  upon  the  amount  of  capital  stock 
which  the  corporation  is  authorized  to  have,  and  a  like  tax  upon  any 
subsequent  increase.  Provided,  that  in  no  case  shall  such  tax  be 
less  than  one  dollar.  Such  tax  shall  be  due  and  payable  upon  the 
incorporation  of  such  corporation  or  upon  the  increase  of  its  capital 
stock.  Except  in  the  case  of  a  railroad  corporation  neither  the  Secre- 
tary of  State  nor  county  clerk  shall  file  any  certificate  of  incorpora- 
tion or  article  of  association,  or  give  any  certificate  to  any  such  cor- 
poration or  association  until  he  is  furnished  a  receipt  for  such  tax 
from  the  State  Treasurer,  and  no  stock  corporation  shall  have  or 
exercise  any  corporate  franchise  or  powers,  or  carry  on  business  in 
this  State  until  such  tax  shall  have  been  paid.  In  case  of  the  con- 
solidation of  existing  corporations  into  a  corporation,  such  new  cor- 
poration shall  be  required  to  pay  the  tax  hereinbefore  provided  for 
only  upon  the  amount  of  its  capital  stock  in  excess  of  the  aggregate 
amount  of  capital  stock  of  said  corporations.  This  section  shall 
not  apply  to  state  and  national  banks  or  to  building,  mutual  loan, 
accumulating  fund  and  co-operative  associations.  *  *  * 

§  181.  License  tax  on  foreign  corporations. — Every  foreign  cor- 
poration, except  banking  corporations,  fire,  marine,  casualty  and  life 
insurance  companies,  co-operative  fraternal  insurance  companies  and 
building  and  loan  associations,  authorized  to  do  business  under  the 
general  corporation  law,  shall  pay  to  the  State  Treasurer,  for  the 
use  of  the  State,  a  license  fee  of  one-eighth  of  one  per  centum  for 
the  privilege  of  exercising  its  corporate  franchises  or  carrying  on  its 
business  in  such  corporate  or  organized  capacity  in  this  State,  to  be 
computed  upon  the  basis  of  the  capital  stock  employed  by  it  within 
this  State,  during  the  first  year  of  carrying  on  its  business  in  this 
State;  and  if  any  year  thereafter  any  such  corporation  shall  employ 
an  increased  amount  of  its  capital  stock  within  this  State,  the  same 
license  fee  shall  be  due  and  payable  upon  any  such  increase.  The 
tax  imposed  by  this  section  on  a  corporation  not  heretofore  subject 
to  its  provisions  shall  be  paid  on  the  first  day  of  December,  nineteen 
hundred  and  one,  to  be  computed  upon  the  basis  of  the  amount  of 
capital  stock  employed  by  it  within  the  State  during  the  year  pre- 
ceding such  date,  unless  on  such  date  such  corporation  shall  not  have 
employed  capital  within  the  State  for  a  period  of  thirteen  months  in 
which  case  it  shall  be  paid  within  the  time  otherwise  provided  by 
this  section.  No  action  shall  be  maintained  or  recovery  had  in  any 
of  the  courts  in  this  State  bv  such  foreign  corporation  without  ob- 
taining a  receipt  for  the  license  fee  hereby  imposed  within  thirteen 
months  after  beginning  such  business  within  the  State,  or  if  at  the 


THE  TAX   LAW.  353 

time  this  section  takes  effect  such  a  corporation  has  been  engaged  in 
business  within  this  State  for  more  than  twelve  months,  without  ob- 
taining such  receipt  within  thirty  days  after  such  tax  is  due. 

§  182.  Franchise  tax  on  corporations. — Every  corporation,  joint 
stock  company  or  association  incorporated,  organized  or  formed  un- 
der, by  or  pursuant  to  law  in  this  State,  shall  pay  to  the  State  Treas- 
urer annually,  an  annual  tax  to  be  computed  upon  the  basis  of  the 
amount  of  its  capital  stock  employed  within  this  State  and  upon 
each  dollar  of  such  amount,  at  the  rate  of  one-quarter  of  a  mill  for 
each  one  per  centum  of  dividends  made  and  declared  upon  its  capital 
stock  during  each  year  ending  with  the  thirty-first  day  of  October, 
if  the  dividends  amount  to  six  or  more  than  six  per  centum  upon 
the  par  value  of  such  capital  stock.  If  such  dividend  or  dividends 
amount  to  less  than  six  per  centum  on  the  par  value  of  the  capital 
stock,  the  tax  shall  be  at  the  rate  of  one  and  one-half  mills  upon 
such  portion  of  the  capital  stock  at  par  as  the  amount  of  capital 
employed  within  this  State  bears  to  the  entire  capital  of  the  corpora- 
tion. If  no  dividend  is  made  or  declared,  the  tax  shall  be  at  the  rate 
of  one  and  one-half  mills  upon  each  dollar  of  the  appraised  capital 
employed  within  the  State.  If  such  corporation,  joint  stock  company 
or  association  shall  have  more  than  one  kind  of  capital  stock,  and 
upon  one  of  such  kinds  of  stock  a  dividend  or  dividends  amounting 
to  six,  or  more  than  six  per  centum,  upon  the  par  value  thereof,  has 
been  made  or  declared,  and  upon  the  other  no  dividend  has  been 
made  or  declared,  or  the  dividend  or  dividends  made  or  declared 
thereon  amount  to  less  than  six  per  centum  upon  the  par  value  there- 
of, then  the  tax  shall  be  at  the  rate  of  one-quarter  of  a  mill  for  each 
one  per  centum  of  dividends  made  or  declared  upon  the  capital  stock 
upon  the  par  value  of  which  the  dividend  or  dividends  made  or  de- 
clared amount  to  six  or  more  than  six  per  centum,  and  in  addition 
thereto,  a  tax  shall  be  charged  at  the  rate  of  one  and  one-half  mills 
upon  every  dollar  of  the  valuation  made  in  accordance  with  the  pro- 
visions of  this  act  of  the  capital  stock  upon  which  no  dividend  was 
made  or  declared,  or  upon  the  par  value  of  which  the  dividend  or 
dividends  made  or  declared  did  not  amount  to  six  per  centum;  *  *  * 
Every  corporation,  joint  stock  company  or  association  organized, 
incorporated  or  formed  under  the  laws  of  any  other  state  or  country 
shall  pay  a  like  tax  for  the  privilege  of  exercising  its  corporate  fran- 
chises or  carrying  on  its  business  in  such  corporate  or  organized 
capacity  in  this  State,  to  be  computed  upon  the  basis  of  the  capital 
employed  by  it  within  this  State. 

§  183.  Certain  corporations  exempt  from  tax  on  capital  stock. — 
Banks,  savings  banks,  institutions  for  savings,  title  guaranty,  insur- 
ance or  surety  -corporations,  every  trust  company  incorporated,  or- 
ganized or  formed,  under,  by  or  pursuant  to  a  law  of  this  State, 
and  any  company  authorized  to  do  a  trust  company  business  solely 
or  in  connection  with  any  other  business,  under  a  general  law  or 
special  law  of  this  State,  laundry  corporations,  manufacturing  cor- 
porations to  the  extent  only  of  the  capital  actually  employed  in  this 
State  in  manufacturing,  and  jn  the  sale  of  the  product  of  such  man- 
ufacturing, mining  corporations,  wholly  engaged  in  mining  ores 
within  this  State,  agricultural  and  horticultural  societies  or  associa- 
tions, and  corporations,  joint  stock  companies  or  associations  operat- 
ing elevated  railroads  or  surface  railroads  not  operated  by  steam,  or 


354  NEW   YORK   CORPORATIONS. 

formed  for  supplying  water  or  gas  for  electric  or  steam  heating, 
lighting  or  power  purposes,  and  liable  to  a  tax  under  sections  one 
hundred  and  eighty-five  and  one  hundred  and  eighty-six  of  this  chap- 
ter, shall  be  exempt  from  the  payment  of  the  taxes  prescribed  by 
section  one  hundred  and  eighty-two  of  this  chapter.  But  such  a 
laundrying,  manufacturing  or  mining  corporation  shall  not  be  ex- 
empted from  the  payment  of  such  tax,  unless  at  least  forty  per  centum 
of  the  capital  stock  of  such  corporation  is  invested  in  property  in 
this  State  and  used  by  it  in  its  laundrying,  manufacturing  or  mining 
business  in  this  State. 

§  184.  Additional  franchise  tax  on  transportation  and  transmis- 
sion corporations  and  associations. — Every  corporation  and  joint  stock 
association  formed  for  steam  surface  railroad,  canal,  steamboat,  ferry, 
express,  navigation,  pipe-line,  transfer,  baggage  express,  telegraph, 
telephone,  palace  car  or  sleeping  car  purposes,  and  all  other  transpor- 
tation corporations  not  liable  to  taxes  under  sections  one  hundred 
and  eighty-five  or  one  hundred  and  eighty-six  of  this  chapter,  shall 
pay  for  the  privilege  of  exercising  its  corporate  franchises  or  carry- 
ing on  its  business  in  such  corporate  or  organized  capacity  in  this 
State,  an  annual  excise  tax  or  license  fee  which  shall  be  equal  to  five- 
tenths  of  one  per  centum  upon  its  gross  earnings  within  the  State, 
which  shall  include  its  gross  earnings  from  its  transportation  or 
transmission  business  originating  and  terminating  within  this  State, 
but  shall  not  include  earnings  derived  from  business  of  an  interstate 
character.  All  settlements  for  such  taxes  heretofore  based  by  the 
comptroller  upon  gross  earnings  excluding  earnings  from  interstate 
business,  have  been  ratified  and  confirmed,  except  that  the  accounts 
for  taxation  under  section  six  of  chapter  three  hundred  and  sixty- 
one,  of  the  laws  of  eighteen  hundred  and  eighty-one,  for  the  years 
eighteen  hundred  and  ninety-two  and  eighteen  hundred  and  ninety- 
three,  shall  be  settled  and  adjusted  by  the  comptroller  by  excluding 
the  earnings  of  an  interstate  character  as  provided  by  this  section. 

§  186.  Franchise  tax  on  water-works  companies,  gas  companies, 
electric  or  steam  heating,  lighting  and  power  companies. — Every  cor- 
poration, joint  stock  company  or  association  formed  for  supplying 
water  or  gas,  or  for  electric  or  steam  heating,  lighting  or  power  pur- 
poses, shall  pay  to  the  state  for  the  privilege  of  exercising  its  cor- 
porate franchises  or  carrying  on  its  business  in  such  corporate  or 
organized  capacity  in  this  State,  an  annual  tax  which  shall  be  five- 
tenths  of  one  per  centum  upon  its  gross  earnings  from  all  sources 
within  this  State,  and  three  per  centum  upon  the  amount  of  divi- 
dends declared  or  paid  in  excess  of  four  per  centum  upon  the  actual 
amount  of  paid-up  capital  employed  by  such  corporation,  joint  stock 
company  or  association. 

§  189.  Reports  of  corporations. — Corporations  liable  to  pay  a 
tax  under  this  article  shall  report  as  follows: 

T.  CORPORATIONS  PAYING  FRANCHISE  TAX. — Every  corporation,  as- 
sociation or  joint  stock  company  liable  to  pay  a  tax  under  section 
one  hundred  and  eighty-two  of  this  chapter  shall,  on  or  before  No- 
vember fifteenth  in  each  year,  make  a  written  report  to  the  comp- 
troller of  its  condition  at  the  close  of  its  business  on  October  thirty- 
first  preceding,  stating  the  amount  of  its  authorized  capital  stock, 


THE  TAX   LAW.  355 

the  amount  of  stock  paid  in,  the  date  and  rate  per  centum  of  each 
dividend  declared  by  it  during  the  year  ending  with  such  day,  the 
entire  amount  of  the  capital  of  such  corporation,  and  the  capital  em- 
ployed by  it  in  this  State  during  such  year. 

2.  TRANSPORTATION  AND  TRANSMISSION  CORPORATIONS. — Every  trans- 
portation or  transmission  corporation,  joint  stock  company  or  asso- 
ciation liable  to  pay  an  additional  tax  under  section  one  hundred  and 
eighty-four  of  this  chapter,  shall  also,  on  or  before  August  first  in 
each  year,  make  a  written  report  to  the  comptroller  of  its  condition 
at  the  close  of  its  business  on  June  thirtieth  preceding,  stating  the 
amount  of  its  gross  earnings  from  all  sources  and  the  amount  of 
its  gross  earnings  from  its  transportation  or  transmission  business 
originating  and  terminating  within  this  State. 

4.  WATER-WORKS,  GAS,  ELECTRIC,  STEAM  HEATING,  LIGHTING  AND  POWER 
c'ORPORATioNs. — Every  corporation,  joint  stock  company  or  associa- 
tion liable  to  pay  a  tax  under  section  one  hundred  and  eighty-six  of 
this  chapter,  shall,  on  or  before  December  first  of  each  year,  make  a 
written  report  to  the  comptroller  of  its  condition  at  the  close  of  its 
business  on  October  thirty-first  preceding,  stating  the  amount  of  its 
gross  earnings  from  business  done  in  this  State,  the  amount  of  divi- 
dends of  every  nature  declared  or  paid  during  the  year  ending  with 
October  thirty-first,  the  authorized  capital  of  the  company  and  the 
amount  of  capital  stock  actually  issued  and  outstanding. 

§  190.  Value  of  stock  to  be  appraised. — In  case  no  dividend  has 
been  declared,  by  a  corporation,  association  or  joint  stock  company 
liable  to  pay  a  tax  under  section  one  hundred  and  eighty-two  of  this 
chapter,  the  treasurer  or  secretary  of  the  company  shall,  under  oath, 
between  the  first  and  fifteenth  day  of  November  in  each  year,  esti- 
mate and  appraise  the  capital  stock  of  such  company  upon  which  no 
dividend  has  been  declared,  or  upon  which  the  dividend  amounted 
to  less  than  six  per  centum  at  its  actual  value  in  cash,  not  less,  how- 
ever, than  the  average  price  which  said  stock  sold  for  during  said 
year,  and  shall  forward  the  same  to  the  comptroller  with  the  report 
provided  for  in  the  last  section.  If  the  comptroller  is  not  satisfied 
with  the  valuation  so  made  and  returned  he  is  authorized  and  em- 
powered to  make  a  valuation  thereof,  and  settle  an  account  upon  the 
valuation  so  made  by  him,  and  the  taxes,  penalties  and  interest  to 
be  paid  the  State. 

§  191.  Further  requirements  as  to  report  of  corporations. — Every 
report  required  by  this  article  shall  have  annexed  thereto,  the  affi- 
davit of  the  president,  vice-president,  secretary  or  treasurer  of  the 
corporation,  association  or  joint  stock  company  or  of  the  person  or 
one  of  the  persons,  or  the  members  of  the  partnership  making  the 
same,  to  the  effect  that  the  statements  contained  therein  are  true. 
Such  reports  shall  contain  any  other  data,  information  or  matter 
which  the  comptroller  may  require  to  be  included  therein,  and  he 
may  prescribe  the  form  in  which  such  reports  shall  be  made  and  the 
form  of  oath  thereto.  When  so  prescribed  such  form  shall  be  used 
in  making  the  report.  The  comptroller  may  require  at  any  time  a 
further  or  supplemental  report  under  this  article,  which  shall  con- 
tain information  and  data  upon  such  matters  as  the  comptroller  may 
specify. 


356  NEW   YORK   CORPORATIONS. 

§  192.  Powers  of  comptroller  to  examine  into  affairs  of  corpora- 
tion.— In  case  any  report  required  by  any  of  the  preceding  sections 
of  this  article  shall  be  unsatisfactory  to  the  comptroller,  or  if  any 
such  report  is  not  made  as  herein  required,  the  comptroller  is  au- 
thorized to  make  an  estimate  of  the  dividends  paid  by  such  corpora- 
tion and  the  value  of  the  capital  stock  employed  by  it,  from  any  such 
report  or  from  any  other  data,  and  to  order  and  state  an  account 
according  to  the  estimate  and  value  so  made  by  him  for  the  taxes, 
percentage  and  interest  due  the  state  from  such  corporation,  asso- 
ciation, joint  stock  company,  person  or  partnership.  The  comptroller 
shall  also  have  power  to  examine  or  cause  to  be  examined  in  case  of 
a  failure  to  report  or  in  case  the  report  is  unsatisfactory  to  him,  the 
books  and  records  of  any  such  corporation,  joint  stock  association, 
company,  foreign  banker,  person  or  partnership,  and  may  hear  testi- 
mony and  take  proofs  material  for  his  information,  either  personally 
or  he  may  appoint  a  commissioner  by  a  written  appointment  under 
his  hand  and  official  seal  for  that  purpose.  Every  commissioner  so 
appointed  shall  be  authorized  to  make  such  examination  and  take 
such  testimony  and  hear  such  proofs  and  report  the  proofs  and  testi- 
mony so  taken  and  the  result  of  his  examination  so  made  and  the 
facts  found  by  him  to  the  comptroller.  The  comptroller  shall,  there- 
from, or  from  any  other  data  which  shall  be  satisfactory  to  him, 
order  and  state  an  account  for  the  tax  due  the  state,  together  with 
the  expenses  of  such  examination  and  the  taking  of  such  testimony 
and  proofs.  Such  expenses  shall  be  fixed  and  adjusted  by  the  comp- 
troller. 

§  193.  Notice  of  statement  of  tax;  interest. — Upon  auditing  and 
stating  every  account  for  taxes  or  other  charges  under  this  article, 
the  comptroller  shall  forthwith  send  notice  thereof  in  writing  to  the 
person,  partnership,  company,  association  or  corporation  against 
whom  the  same  is  made,  which  notice  may  be  mailed  to  the  post- 
office  address  of  such  person,  partnership,  association,  company  or 
corporation.  All  accounts  so  audited  and  stated  shall  bear  interest 
upon  the  total  amount  found  due  thereon  to  the  state,  for  taxes,  per- 
centage, interest  and  other  charges,  from  the  expiration  of  thirty 
days  after  sending  such  notice  until  payment  thereof  shall  be  made. 

§  194.  Payment  of  tax  and  penalty  for  failure. — A  tax  imposed 
by  section  one  hundred  and  eighty-two  or  one  hundred  and  eighty- 
six  of  this  chapter,  shall  be  due  and  payable  into  the  State  Treasury 
on  or  before  the  fifteenth  day  of  January  in  each  year.  A  tax  im- 
posed by  section  one  hundred  and  eighty-four  of  this  chapter  on  a 
transportation  or  transmission  corporation,  or  by  section  one  hun- 
dred and  eighty-five,  on  elevated  railroads  or  surface  railroads  not 
operated  by  steam  shall  be  due  and  payable  into  the  State  Treasury 
on  or  before  the  first  day  of  August  in  each  year.  A  tax  imposed 
by  section  one  hundred  and  eighty-seven  of  this  chapter  on  an  in- 
surance corporation  shall  be  due  and  payable  into  the  State  Treasury 
on  or  before  the  first  day  of  June  in  each  year.  A  tax  imposed  by 
section  one  hundred  and  eighty-seven-a  or  one  hundred  and  eighty- 
seven-b  shall  be  due  and  payable  into  the  State  Treasury  on  or  be- 
fore the  first  day  of  September  in  each  year.  A  tax  imposed  by 
section  one  hundred  and  eighty-eight  of  this  chapter  on  a  foreign 
banker  shall  be  due  and  payable  into  the  State  Treasury  on  or  be- 
fore February  first  in  each  year.  If  such  tax  in  any  case  is  not  paid 
within  thirty  days  after  the  same  becomes  due,  or  if  the  report  of 


THE  TAX   LAW.  357 

any  such  corporation  is  not  made  within  the  time  required  by  this 
article,  the  corporation,  association,  joint  stock  company,  person  or 
partnership,  liable  to  pay  the  tax,  shall  pay  into  the  State  Treasury 
in  addition  to  the  amount  of  such  tax,  a  sum  equal  to  five  pej  centum 
thereof,  and  one  per  centum  additional  for  each  month  the  tax  re- 
mains unpaid,  which  sum  shall  be  added  to  the  tax  and  paid  or  col- 
lected therewith.  Every  corporation,  association,  joint  stock  com- 
pany, person  or  partnership  failing  to  make  the  annual  report  re- 
quired by  this  article,  or  failing  to  make  any  special  report  required 
by  the  comptroller,  within  any  reasonable  time  to  be  specified  by 
him,  shall  forfeit  to  the  people  of  the  State  the  sum  of  one  hundred 
dollars  for  every  such  failure,  and  the  additional  sum  of  ten  dollars  for 
each  day  that  such  failure  continues.  Such  tax  shall  be  a  lien  upon 
and  bind  all  the  real  and  personal  property  of  the  corporation,  joint 
stock  company  or  association  liable  to  pay  the  same  from  the  time 
when  it  is  payable  until  the  same  is  paid  in  full. 

§  195.  Revision  and  readjustment  of  accounts  by  comptroller. — • 
The  comptroller  may,  at  any  time  within  one  year  from  the  time 
any  such  account  shall  have  been  audited  and  stated,  and  notice  there- 
of sent  to  the  person,  partnership,  company,  association  or  corpora- 
tion against  whom  it  is  stated,  revise  and  readjust  such  account  upon 
application  therefor  by  the  party  against  whom  the  account  is  stated 
or  by  the  Attorney  General,  and  if  it  shall  be  made  to  appear  upon 
any  such  application  by  evidence  submitted  to  him  or  otherwise, 
that  any  such  account  included  taxes  or  other  charges  which  could 
not  have  been  lawfully  demanded,  or  that  payment  has  been  legally 
made  or  exacted  of  any  such  account,  he  shall  resettle  the  same  ac- 
cording to  law  and  the  facts,  and  charge  or  credit,  as  the  case  may 
require,  the  difference,  if  any,  resulting  from  such  revision  or  re- 
settlement upon  the  accounts  for  taxes  of  or  against  any  such  per- 
son, partnership,  company,  association  or  corporation.  Such  credit, 
whether  allowed  before  or  after  the  passage  of  this  act,  may  be,  by 
'he  person,  partnership,  company,  association  or  corporation  in  whose 
favor  it  is  allowed,  assigned  to  a  person,  partnership,  company,  asso- 
ciation or  corporation  liable  to  pay  taxes  under  article  nine  of  this 
act  and  the  assignee  of  the  whole  or  any  part  of  such  credit  on  filing 
with  the  comptroller  such  assignment  shall  thereupon  be  entitled  to 
credit  on  the  books  of  the  comptroller  for  the  amount  thereof  on  the 
current  account  for  taxes  of  such  assignee  in  the  same  way  and  with 
ihe  same  effect  as  though  the  credit  had  originally  been  allowed  in 
favor  of  such  assignee.  The  comptroller  shall  forthwith  send  written 
notice  of  his  determination  upon  such  application  to  the  applicant, 
and  to  the  Attorney  General,  which  notice  may  be  sent  by  mail  to 
his  post-office  address. 

§  196.     Review   of   determination   of  comptroller  by   certiorari. — 

The  determination  of  the  comptroller  upon  any  application  made  to 
him  by  any  person,  partnership,  company,  association  or  corporation 
for  a  revision  and  resettlement  of  any  account,  as  prescribed  in  this 
article,  may  be  reviewed  both  upon  the  law  and  the  facts,  upon 
certiorari  by  the  Supreme  Court  at  the  instance  of  any  person,  part- 
rership,  company,  association  or  corporation  affected  thereby,  and  in 
the  name  and  on  behalf  of  the  people  of  the  State.  For  the  purpose 
of  such  review  the  comptroller  shall  return,  on  such  certiorari,  the 
accounts  and  all  the  evidence  before  him  on  such  application,  and  all 
the  papers  and  proofs  upon  the  original  statement  of  such  account 


358  NEW   YORK    CORPORATIONS. 

and  all  proceedings  thereon.  If  the  original  or  resettled  accounts 
shall  be  found  erroneous  or  illegal,  either  in  point  of  law  or  of  fact, 
by  the  Supreme  Court,  upon  any  such  review,  the  accounts  reviewed 
shall  then  be  corrected  and  restated,  and  from  any  determination  of 
the  Supreme  Court  upon  any  such  review,  an  appeal  to  the  Court  of 
Appeals  may  be  taken  by  either  party. 

§  197.  Regulations  as  to  such  writ  of  certiorari. — No  certiorari 
to  review  any  audit  and  statement  of  an  account  or  any  determina- 
tion by  the  comptroller  under  this  article,  shall  be  granted  unless 
notice  of  application  therefor  is  made  within  thirty  days  after  the 
service  of  the  notice  of  such  determination.  Eight  days'  notice  shall 
be  given  to  the  comptroller  of  the  application  for  such  writ.  The 
full  amount  of  the  taxes,  percentage,  interest  and  other  charges, 
audited  and  stated  in  such  account,  must  be  deposited  with  the  State 
Treasurer  before  making  the  application  and  an  undertaking  filed 
with  the  comptroller  in  such  amount  and  with  such  sureties  as  a 
justice  of  the  Supreme  Court  shall  approve,  to  the  effect  that  if  such 
writ  is  dismissed  or  the  determination  of  the  comptroller  affirmed, 
the  applicant  for  the  writ  will  pay  all  costs  and  charges  which  may 
accrue  against  him,  or  it  in  the  prosecution  of  the  writ,  including 
costs  of  all  appeals. 

§  198.  Warrant  for  the  collection  of  taxes. — After  the  expiration 
of  thirty  days  from  the  sending  by  the  comptroller  of  a  notice  of  a 
statement  of  an  account  as  provided  in  this  article,  unless  the  amount 
of  such  account  shall  have  been  paid  or  deposited  with  the  State 
Treasurer,  if  an  appeal  or  other  proceeding  have  been  taken  to  re- 
view the  same,  and  the  undertaking  given  as  provided  in  this  article, 
the  comptroller  may  issue  a  warrant  under  his  hand  and  official  seal, 
directed  to  the  sheriff  of  any  county  of  the  state,  commanding  him 
to  levy  upon  and  sell  the  real  and  personal  property  of  the  person, 
partnership,  company,  association  or  corporation  against  which  such 
account  is  stated,  found  within  his  county  for  the  payment  of  the 
amount  thereof  with  interest  thereon  and  costs  of  executing  the 
warrant,  and  to  return  such  warrant  to  the  comptroller  and  pay  to 
the  State  Treasurer  the  money  collected  by  virtue  thereof,  by  a  time 
to  be  therein  specified,  not  less  than  sixty  days  from  the  date  of  the 
warrant.  Such  warrant  shall  be  a  lien  upon  and  shall  bind  the  real 
and  personal  property  of  the  person,  partnership,  company,  associa- 
tion or  corporation  against  which  it  is  issued,  from  the  time  an  actual 
levy  shall  be  made  by  virtue  thereof.  The  sheriff  to  whom  any  such 
warrant  shall  be  directed  shall  proceed  upon  the  same  in  all  respects, 
with  like  effect,  and  in  the  same  manner  as  prescribed  by  law  in 
respect  to  executions  issued  against  property  upon  judgments  of 
a  court  of  record,  and  shall  be  entitled  to  the  same  fees  for  his  ser- 
vices in  executing  the  warrant,  to  be  collected  in  the  same  manner. 

§  199.  Information  of  delinquents. — It  shall  be  the  duty  of  any 
person  having  knowledge  of  the  evasion  of  taxation  under  this  article 
by  any  corporation,  association,  joint  stock  company,  partnership  or 
person  liable  to  taxation  thereunder,  for  any  omission  on  their  part 
to  make  the  reports  required  by  this  article,  to  make  a  written  re- 
port thereof  to  the  comptroller  of  the  state,  with  such  information 
as  may  be  in  his  possession  as  may  lead  to  the  recovery  of  any  taxes 
due  the  state  therefrom.  If,  in  his  opinion,  the  interests  of  the  state 
require  it,  the  comptroller  may  employ  such  person  to  assist  in  the 


THE   TAX    LAW.  359 

collection  and  preparation  of  evidence  and  in  the  prosecution  and 
trial  of  actions  for  such  taxes,  and  so  much  of  the  same,  not  ex- 
ceeding ten  per  centum  thereof,  as  may  be  collected  from  any  such 
delinquent  corporation,  association,  company,  partnership  or  person, 
by  reason  of  such  reports  and  such  services,  as  shall  have  been  agreed 
upon  between  such  person  and  the  comptroller  or  Attorney  General  as 
a  compensation  therefor,  shall  be  paid  to  such  person,  and  nothing 
shall  be  paid  to  such  person  for  such  report  or  services  unless  there 
shall  be  a  recovery  of  taxes  by  reason  thereof. 

§  200.  Action  for  recovery  of  taxes;  forfeiture  of  charter  of  de- 
linquent corporation. — An  action  may  be  brought  by  the  Attorney 
General,  at  the  instance  of  the  comptroller,  in  the  name  of  the  state, 
to  recover  the  amount  of  any  account  audited  and  stated  by  the 
comptroller  under  the  provisions  of  this  article.  If  any  such  account 
shall  remain  unpaid  at  the  expiration  of  one  year  after  notice  of 
the  statement  thereof  has  been  sent  as  required  by  this  article,  and 
the  comptroller  is  satisfied  that  the  failure  to  pay  the  same  is  inten- 
tional, he  shall  so  report  to  the  Attorney  General,  who  shall  im- 
mediately bring  an  action,  in  the  name  of  the  people  of  the  state, 
for  the  forfeiture  of  the  franchise  of  any  corporation,  joint  stock 
company  or  association  failing  to  make  such  payment,  -and  if  it  is 
found  that  such  failure  was  intentional,  judgment  shall  be  rendered 
in  such  action  for  the  forfeiture  of  its  franchise  and  for  its  dissolu- 
tion, and  thereafter  such  franchise  shall  be  annulled. 

§  202.  Exemption  from  other  state  taxation. — The  personal  prop- 
erty of  every  corporation,  company,  association  or  partnership,  tax- 
able under  this  article,  other  than  for  an  organization  tax,  shall  be 
exempt  from  assessment  and  taxation  upon  its  personal  property  for 
state  purposes,  and  the  personal  property  of  every  corporation  tax- 
able under  section  one  hundred  and  eighty-seven-a  of  this  article, 
other  than  for  an  organization  tax,  and  as  provided  in  chapter  thirty- 
seven  of  the  general  laws,  shall  be  exempt  from  assessment  and  tax- 
ation for  all  other  purposes,  if  all  taxes  due  and  payable  under  this 
article  have  been  paid  thereby.  The  personal  property  of  a  private 
or  individual  banker,  actually  employed  in  his  business  as  such  banker, 
shall  be  exempt  from  taxation  for  state  purposes,  if  such  private  or 
individual  banker  shall  have  paid  all  taxes  due  and  payable  under  this 
article.  Such  corporation  and  private  or  individual  banker  shall  in 
no  other  respect  be  relieved  from  assessment  and  taxation  by  reason 
of  the  provisions  of  this  article.  The  owner  and  holder  of  stock  in 
an  incorporated  trust  company  liable  to  taxation  under  the  provisions 
of  this  act  shall  not  be  taxed  as  an  individual  for  such  stock. 

§  203.  Application  of  taxes. — The  taxes  imposed  by  this  article 
and  the  revenues  thereof  shall  be  applicable  to  the  general  fund  of 
the  treasury  and  to  the  payment  of  all  claims  and  demands  which 
are  a  lawful  charge  thereon. 


360  NEW   YORK   CORPORATIONS. 

STOCK  TRANSFER  TAX. 


An  Act  to  Amend  the  Tax  Law,  by  Providing  for  a  Tax  on  Transfers 
of  Stock.     Became  a  Law,  April  10,  1905. 

§  I.  Chapter  nine  hundred  and  eight  of  the  laws  of  eighteen 
hundred  and  ninety-six,  entitled  "An  act  in  relation  to  taxation  con- 
stituting chapter  twenty-four  of  the  general  laws,"  is  hereby  amended 
by  inserting  therein  a  new  article  to  be  article  fifteen  and  to  read  as 
follows: 


ARTICLE  XV. 
TAX  ON  TRANSFERS  OF  STOCK. 

SECTION  315.  Amount  of  tax. 

316.  Stamps  how  prepared  and  sold. 

317.  Penalty  for  failure  to  pay  tax. 

318.  Cancelling  stamps;  penalty  for  failure. 

319.  Contracts  for  dies;  expenses  how  paid. 

320.  Illegal   use  of  stamps;  penalty. 

321.  Power  of  State  Comptroller. 

322.  Civil  penalty;  how  recovered. 

323.  Effect  of  failure  to  pay  tax. 

324.  Application  of  taxes. 

§  315.  Amount  of  tax. — There  is  hereby  imposed  and  there  shall 
immediately  accrue  and  be  collected  a  tax  as  herein  provided,  on  all 
sales,  or  agreements  to  sell,  or  memoranda  of  sales  or  deliveries  or 
transfers  of  shares  or  certificates  of  stock  in  any  domestic  or  for- 
eign association,  company  or  corporation,  made  after  the  first  day  of 
June,  nineteen  hundred  and  five,  whether  made  upon  or  shown  by 
the  books  of  the  association,  company  or  corporation,  or  by  any  as- 
signment in  blank,  or  by  any  delivery,  or  by  any  paper  or  agreement 
or  memorandum  or  other  evidence  of  transfer  or  sale  whether  en- 
titling the  holder  in  any  manner  to  the  benefit  of  such  stock,  or  to 
secure  the  future  payment  of  money  or  the  future  transfer  of  any 
stock,  on  each  hundred  dollars  of  face  value  or  fraction  thereof,  two 
cents.  It  is  not  intended  by  this  act  to  impose  a  tax  upon  an  agree- 
ment evidencing  the  deposit  of  stock  certificates  as  collateral  security 
for  money  loaned  thereon  which  stock  certificates  are  not  actually 
sold,  nor  upon  such  stock  certificates  so  deposited.  The  payment  of 
such  tax  shall  be  denoted  by  an  adhesive  stamp  or  stamps  affixed 
as  follows:  In  case  of  sale  where  the  evidence  of  transfer  is  shown 
only  by  the  books  of  the  company  the  stamp  shall  be  placed  upon 
such  books;  and  where  the  change  of  ownership  is  by  transfer  cer- 
tificate the  stamp  shall  be  placed  upon  the  certificate;  and  in  cases 
of  an  agreement  to  sell  or  where  the  transfer  is  by  delivery  of  the 
certificate  assigned  in  blank  there  shall  be  made  and  delivered 
by  the  seller  to  the  buyer  a  bill  or  memorandum  of  such  sale  to 


THE   TAX    LAW.  361 

which  the  stamp  provided  for  by  this  article  shall  be  affixed;  and 
every  bill  or  memorandum  of  sale  or  agreement  to  sell  before  men- 
tioned shall  show  the  date  thereof,  the  name  of  the  seller,  the  amount 
of  the  sale,  and  the  matter  or  thing  to  which  it  refers,  and  no  further 
tax  is  hereby  imposed  upon  the  delivery  of  the  certificate  of  stock, 
or  upon  the  actual  issue  of  a  new  certificate  when  the  original  cer- 
tificate of  stock  is  accompanied  by  the  duly  stamped  memorandum 
of  sale. 

§  316.  Stamps  how  prepared  and  sold. — Adhesive  stamps  for  the 
purpose  of  paying  the  state  tax  provided  for  by  this  article  shall  be 
prepared  by  the  State  Comptroller,  in  such  form,  and  of  such  de- 
nominations and  in  such  quantities  as  he  may  from  time  to  time  pre- 
scribe, and  shall  be  sold  by  him  to  the  person  or  persons  desiring 
to  purchase  the  same;  he  shall  make  provision  for  the  sale  of  such 
stamps  in  such  places  and  at  such  times  as  in  his  judgment  he  may 
deem  necessary. 

§  317.  Penalty  for  failure  to  pay  tax. — Any  person  or  persons 
who  shall  make  any  sale,  without  paying  the  tax  by  this  article  im- 
posed or  who  shall  in  pursuance  of  any  sale,  deliver  any  stock,  or 
evidence  of  the  sale  of  any  stock  or  bill  or  memorandum  thereof, 
without  having  the  stamps  provided  for  in  this  article  affixed  thereto, 
shall  be  deemed  guilty  of  a  misdemeanor,  and  upon  conviction  thereof 
shall  pay  a  fine  of  not  less  than  five  hundred  nor  more  than  one  thou- 
sand dollars,  or  be  imprisoned  not  more  than  six  months,  or  by 
both  such  fine  and  imprisonment  at  the  discretion  of  the  court. 

§  318.  Cancelling  stamps;  penalty  for  failure.— In  every  case 
where  an  adhesive  stamp  shall  be  used  to  denote  the  payment  of  the 
state  tax  provided  by  this  article  the  person  using  or  affixing  the 
same  shall  write  or  stamp  thereupon  the  initials  of  his  name  and  the 
date  upon  which  the  same  shall  be  attached  or  used,  and  shall  cut 
or  perforate  the  stamp  in  a  substantial  manner,  so  that  such  stamp 
can  not  be  again  used;  and  if  any  person  fraudulently  makes  use  of 
an  adhesive  stamp  to  denote  the  state  tax  imposed  by  this  article, 
without  so  effectually  cancelling  and  obliterating  such  stamp  such 
person  shall  be  deemed  guilty  of  a  misdemeanor,  and  upon  convic- 
tion thereof  shall  pay  a  fine  of  not  less  than  two  hundred  nor  more 
than  five  hundred  dollars  or  be  imprisoned  for  not  less  than  six 
months,  or  both,  at  the  discretion  of  the  court. 

§  319.  Contracts  for  dies;  expenses  how  paid. — The  State  Comp- 
troller is  hereby  directed  to  make,  enter  into  and  execute  for  and  in 
behalf  of  the  state  such  contract  or  contracts  for  dies,  plates  and 
printing  necessary  for  the  manufacture  of  the  stamps  provided  for 
by  this  article,  and  provide  such  stationery  and  clerk  hire  together 
with  such  books  and  blanks  as  in  his  discretion  may  be  necessary 
for  putting  into  operation  the  provisions  of  this  article;  he  shall  be 
the  custodian  of  all  stamps,  dies,  plates  or  other  material  or  thing 
furnished  by  him  and  used  in  the  manufacture  of  such  state  tax 
stamps,  and  all  expenses  incurred  by  him  and  under  his  direction  in 
carrying  out  the  provisions  of  this  article  shall  be  paid  to  him  by 
the  state  treasurer  from  any  moneys  appropriated  for  such  pur- 
pose. 

§  320.  Illegal  use  of  stamps;  penalty. — Any  person  who  shall 
wilfully  remove  or  cause  to  be  removed,  alter  or  cause  to  be  altered 


362  NEW  YORK   CORPORATIONS. 

the  cancelling  or  defacing  marks  of  any  adhesive  stamp  provided  for 
by  this  article  with  intent  to  use  the  same,  or  to  cause  the  use  of  the 
same  after  it  shall  have  been  once  used,  or  shall  knowingly  or  wil- 
fully sell  or  buy  any  washed  or  restored  stamp,  or  offer  the  same 
for  sale,  or  give  or  expose  the  same  to  any  person  for  use,  or  know- 
ingly use  the  same  or  prepare  the  same  with  intent  for  the  further 
use  thereof;  or  shall  wilfully  use  any  counterfeit  stamp  or  any  forged 
stamp  with  intent  to  defraud  the  State  of  New  York,  shall  be  guilty 
of  a  misdemeanor  and  on  conviction  thereof  shall  be  liable  to  a  fine 
of  not  less  than  five  hundred  nor  more  than  one  thousand  dollars, 
or  be  imprisoned  for  not  more  than  six  months,  or  by  both  such 
fine  and  imprisonment,  at  the  discretion  of  the  court. 

§  321.  Power  of  State  Comptroller. — The  State  Comptroller  may 
at  any  time  after  transfers  of  stock  which  by  the  provisions  of  this 
article  are  subject  to  a  state  stamp  tax,  inquire  into  and  ascertain 
whether  the  tax  imposed  by  the  provisions  of  this  article  has  been 
paid.  For  the  purpose  of  ascertaining  such  fact  the  comptroller  shall 
have  the  right  and  it  shall  be  his  duty  to  examine  the  books  and 
papers  of  any  person,  firm,  company,  association  or  corporation. 
If  from  such  examination  the  comptroller  ascertains  that  the  tax 
provided  for  in  this  article  has  not  been  paid  he  shall  bring  an 
action  in  any  court  of  competent  jurisdiction  for  the  recovery  of- 
such  tax  and  for  any  penalty  incurred  by  any  person  under  the  pro- 
visions of  this  article. 

§  322.  Civil  penalty;  how  recovered. — Any  person  who  shall 
violate  the  provisions  of  this  article  shall  in  addition  to  the  penal- 
ties herein  provided  forfeit  to  the  people  of  the  state  a  civil  penalty 
of  five  hundred  dollars  for  each  violation.  The  State  Comptroller 
shall  bring  an  action  in  his  name  as  such  comptroller  in  any  court 
of  competent  jurisdiction  for  the  recovery  of  any  civil  penalty  and 
all  moneys  collected  by  him  shall  be  paid  into  the  State  Treasury. 

§  323.  Effect  of  failure  to  pay  tax. — No  transfer  of  stock  made 
after  June  first,  nineteen  hundred  and  five,  on  which  a  tax  is  im- 
posed by  this  article,  and  which  tax  is  not  paid,  at  the  time  of  such 
transfer  shall  be  made  the  basis  of  any  action  or  legal  proceedings, 
nor  shall  proof  thereof  be  offered  or  received  in  evidence  in  any 
court  in  this  State. 

§  324.  Application  of  taxes. — The  taxes  imposed  under  this  ar- 
ticle and  the  revenues  thereof  shall  be  paid  by  the  State  Comptroller 
into  the  State  Treasury  and  be  applicable  to  the  general  fund,  and 
to  the  payment  of  all  claims  and  demands  which  are  a  lawful  charge 
thereon. 

§  2.     This  act  shall  take  effect  immediately. 


CODE  OF  CIVIL  PROCEDURE. 

PROVISIONS  AFFECTING  CORPORATIONS. 

Summons. 

§  431.  How  personal  service  of  summons  made  upon  a  domestic 
corporation. — Personal  service  of  the  summons  upon  a  defendant, 
being  a  domestic  corporation,  must  be  made  by  delivering  a  copy 
thereof,  within  the  State,  as  follows: 

3.  *  *  *  to  the  president  or  other  head  of  the  corporation,  the 
secretary  or  clerk  to  the  corporation,  the  cashier,  the  treasurer,  or  a 
director  or  managing  agent. 

§  432.  Id.;  service  upon  a  foreign  corporation. — Personal  service 
of  the  summons,  upon  a  defendant,  being  a  foreign  corporation,  must 
be  made  by  delivering  a  copy  thereof  within  the  State  as  follows: 

1.  To  the  president,  vice-president,  treasurer,  assistant  treasurer, 
secretary  or  assistant  secretary;  or,  if  the  corporation  lacks  either  of 
those  officers,  to  the  officer  performing  corresponding  functions  under 
another  name. 

2.  To  a  person  designated  for  the  purpose  by  a  writing,  under 
the  seal  of  the  corporation,  and  the  signature  of  its  president,  vice- 
president,  or  other  acting  head,  accompanied  with   the  written   con- 
sent of  the  person  designated,  and  filed  in  the  office  of  the  Secretary 
of  State.     The  designation  must  specify  a  place,  within  the  State,  as 
the  office  or  residence  of  the  person  designated;  and,  if  it  is  within 
the  city,  the  street  and  street  number,  if  any,  or  other  suitable  desig- 
nation of  the  particular  locality.     It  remains  in  force  until  the  filing 
in  the  same  office  of  a  written  revocation  thereof,  or  of  the  consent, 
executed  in  like  manner;  but  the  person  designated  may,  from  time 
to  time,  change  the  place  specified  as  his  office  or  residence,  to  some 
other  place  within  the  State,  by  a  writing  executed  by  him,  and  filed 
in  like  manner.     The  Secretary  of  State  may  require  the  execution  of 
any  instrument,   specified  in   this   section,   to   be   authenticated   as   he 
deems  proper,  and  he  may  refuse  to  file  it  without  such  an  authentica- 
tion.    An   exemplified    copy   of   a    designation    so    filed,    accompanied 
with  a  certificate  that  it  has  not  been   revoked,  is  presumptive  evi- 
dence of  the   execution   thereof,   and   conclusive   evidence   of  the   au- 
thority of  the  officer  executing  it. 

3.  If  such  a  designation  is  not  in  force,  or  if  neither  the  person 
designated,  nor  an  officer  specified  in  subdivision  first  of  this  section, 
can  be  found  with   due  diligence,  and  the   corporation   has  property 
within  the  State,  or  the  cause  of  action  arose  therein;  to  the  cashier, 
a  director,  or  a  managing  agent  of  the  corporation,  within  the  State. 

363 


364  NEW   YORK    CORPORATIONS. 

§  433.  Service  of  a  process,  etc. — The  provisions  of  this  article, 
relating  to  the  mode  of  service  of  a  summons,  apply  likewise  to  the 
service  of  any  process  or  other  paper,  whereby  a  special  proceeding 
is  commenced  in  a  court,  or  before  an  officer,  except  a  proceeding  to 
punish  for  contempt,  and  except  where  special  provision  for  the  ser- 
vice thereof  is  otherwise  made  by  law. 

Pleadings. 

§  525.  Verification;  how  and  by  whom  made. — The  verification 
must  be  made  by  the  affidavit  of  the  party,  or,  if  there  are  two  or 
more  parties  united  in  interest,  and  pleading  together,  by  at  least  one 
of  them,  who  is  acquainted  with  the  facts,  except  as  follows: 

I.  Where  the  party  is  a  domestic  corporation,  the  verification 
must  be  made  by  an  officer  thereof.  *  *  * 

3.  Where  the  party  is  a  foreign  corporation;  or  where  the  party 
is  not  within  the  county  where  the  attorney  resides,  or  if  the  latter 
is  not  a  resident  of  the  State,  the  county  where  he  has  his  office,  and 
capable  of  making  the  affidavit;  or,  if  there  are  two  or  more  parties 
united  in  interest,  and  pleading  together,  where  neither  of  them,  ac- 
quainted with  the  facts,  is  within  that  county  and  capable  of  making 
the  affidavit;  or  where  the  action  or  defense  is  founded  upon  a  writ- 
ten instrument  for  the  payment  of  money  only,  which  is  in  the  pos- 
session of  the  agent  or  the  attorney;  or  where  all  the  material  allega- 
tions of  the  pleading  are  within  the  personal  knowledge  of  the  agent 
or  the  attorney;  in  either  case  the  verification  may  be  made  by  the 
agent  of  or  the  attorney  for  the  party. 

Injunction. 

§  610.  Order  must  recite  grounds  (for  injunction) ;  service  of 
order. — The  injunction  order  must  briefly  recite  the  grounds  for  the 
injunction.  Where  it  is  granted  by  the  court,  it  must  be  served  by 
delivering  a  certified  copy  thereof;  where  it  is  granted  by  a  judge,  it 
must  be  served  by  showing  the  original  order,  and  delivering  a  copy 
thereof.  Service  of  the  order,  upon  a  corporation,  may  be  made  as 
prescribed  in  this  act,  for  making  personal  service  of  a  summons 
upon  a  corporation.  Copies  of  the  papers,  upon  which  the  order  was 
granted,  must  be  delivered  with  the  copy  of  the  order. 

Attachment. 

§  636.  What  must  be  shown  to  procure  the  warrant. — To  entitle 
the  plaintiff  to  such  a  warrant,  he  must  show,  by  affidavit,  to  the  satis- 
faction of  the  judge  granting  the  same,  as  follows: 

1.  That  ore  of  the  causes  of  action  specified  in  the  last  section 
exists  against  the  defendant.     If  the  action  is  to  recover  damages  for 
breach  of  a  contract,  the  affidavit  must  show  that  the  plaintiff  is  en- 
titled to  recover  a  sum  stated  therein,  over  and   above  all  counter- 
claims known  to  him. 

2.  That  the  defendant   is  either  a   foreign  corporation  or  not  a 
resident  of  the  State;  or,  if  he  is  a  natural  person  and  a  resident  of 
the  State,  that  he  has  departed  therefrom,  with  intent  to  defraud  his 
creditors,  or  to  avoid  the  service  of  a  summons,  or  keeps  himself  con- 
cealed therein  with  the  like  intent;  or,  if  the  defendant  is  a  natural 
person  or  a  domestic  corporation,  that  he  or  it  has  removed,  or  is 
about  to  remove,  property  from  the  State,  with  intent  to  defraud  his 
or  its  creditors;  or  has  assigned,  disposed  of,  or  secreted,  or  is  about 


CODE  OF  CIVIL  PROCEDURE.  365 

to  assign,  dispose  of,  or  secrete  property,  with  the  like  intent;  or 
where,  for  the  purpose  of  procuring  credit,  or  the  extension  of  credit, 
the  defendant  has  made  a  false  statement  in  writing,  under  his  own 
hand  or  signature,  or  under  the  hand  or  signature  of  a  duly  au- 
thorized agent,  made  with  his  knowledge  and  acquiescence  as  to  his 
financial  responsibility  or  standing.  *  *  * 

§  646.     Attachment  of  unpaid  subscription  to  foreign  corporation. 

— Under  a  warrant  of  attachment  against  a  foreign  corporation,  other 
than  a  corporation  created  by  or  under  the  laws  of  the  United  States, 
the  sheriff  may  levy  upon  the  sum  remaining  unpaid  upon  a  sub- 
scription to  the  capital  stock  of  the  corporation,  made  by  a  person 
within  the  county;  or  upon  one  or  more  shares  of  stock  therein, 
held  by  such  a  person,  or  transferred  by  him,  for  the  purpose  of 
avoiding  payment  thereof. 

§  647.  Attachment;  interest  in  corporation. — The  rights  or  shares 
which  the  defendant  has  in  the  stock  of  an  association  or  corporation, 
together  with  the  interest  and  profits  thereon,  may  be  levied  upon, 
and  the  sheriff's  certificate  of  the  sale  thereof  entitles  the  purchaser 
to  the  same  rights  and  privileges,  with  respect  thereto,  which  the 
defendant  had,  when  they  were  so  attached. 

§  648.  Attachment;  negotiable  instruments. — The  attachment 
may  also  be  levied  upon  a  cause  of  action  arising  upon  contract; 
including  a  bond,  promissory  note,  or  other  instrument  for  the 
payment  of  money  only,  negotiable  or  otherwise,  whether  past  due,  or 
yet  to  become  due,  executed  by  a  foreign  or  domestic  government, 
state,  county,  public  officer,  association,  municipal  or  other  corpora- 
tion, or  by  a  private  person,  either  within  or  without  the  State,  which 
belongs  to  the  defendant,  and  is  found  within  the  county.  The  levy 
of  the  attachment  thereupon  is  deemed  a  levy  upon,  and  a  seizure  and 
attachment  of,  the  debt  represented  thereby. 

§  649.  How  property  to  be  attached. — A  levy  under  a  warrant  of 
attachment  must  be  made  as  follows : 


3.  Upon  other  personal  property,  by  leaving  a  certified  copy  of 
the  warrant,  and  a  notice  showing  the  property  attached  with  the 
person  holding  the  same;  or,  if  it  consists  of  a  demand,  other  than  as 
specified  in  the  last  subdivision,  with  the  person  against  whom  it 
exists;  or,  if  it  consists  of  right  or  share  in  the  stock  of  an  associa- 
tion or  corporation,  or  interests  or  profits  thereon,  with  the  president, 
or  other  head  of  the  association  or  corporation,  or  the  secretary, 
cashier,  or  managing  agent  thereof. 

§  650.  Certificate  of  defendant's  interest  to  be  furnished. — Upon 
the  application  of  a  sheriff,  holding  a  warrant  of  attachment,  the 
president  or  other  head  of  an  association  or  corporation,  or  the  sec- 
retary, cashier,  or  managing  agent  thereof,  or  a  debtor  of  the  de- 
fendant, or  a  person  holding  property,  including  a  bond,  promissory 
note,  or  other  instrument  for  the  payment  of  money,  belonging  to 
the  defendant,  must  furnish  to  the  sheriff  a  certificate,  under  his  hand, 
specifying  the  rights  or  number  of  shares  of  the  defendant,  in  the 
stock  of  the  association  or  corporation,  with  all  dividends  declared, 


366  NEW  YORK   CORPORATIONS. 

or  incumbrances  thereon;  or  the  amount,  nature,  and  description  of 
the  property,  held  for  the  benefit  of  the  defendant,  or  of  the  de- 
fendant's interest  in  property  so  held,  or  of  the  debt  or  demand  owing 
to  the  defendant,  as  the  case  requires. 

§  651.  Person  refusing  certificate  may  be  examined. — If  a  person 
to  whom  application  is  made,  as  prescribed  in  the  last  section,  re- 
fuses to  give  such  a  certificate;  or  if  it  is  made  to  appear,  by  affidavit, 
to  the  satisfaction  of  the  court,  or  a  judge  thereof,  or  the  county 
judge  of  the  county  to  which  the  warrant  is  issued,  that  there  is  rea- 
son to  suspect  that  a  certificate  given  by  him  is  untrue,  or  that  it  fails 
fully  to  set  forth  the  facts,  required  to  be  shown  thereby;  the  court 
or  judge  may  make  an  order,  directing  him  to  attend,  at  a  specified 
time,  and  at  a  place  within  the  county  to  which  the  warrant  is  issued, 
and  submit  to  an  examination  under  oath,  concerning  the  same. 
The  order  may,  in  the  discretion  of  the  court  or  judge,  direct  an  ap- 
pearance before  a  referee  named  therein. 

§  707.  Only  attached  property  bound  when  summons  not  per- 
sonally served. — Where  a  defendant,  who  has  not  appeared,  is  a  non- 
resident of  the  State,  or  a  foreign  corporation,  and  the  summons  was 
served  without  the  State,  or  by  publication,  pursuant  to  an  order  ob- 
tained for  that  purpose,  as  prescribed  in  chapter  fifth  of  this  act,  the 
judgment  can  be  enforced  only  against  the  property  which  has  been 
levied  upon,  by  virtue  of  the  warrant  of  attachment,  at  the  time  when 
the  judgment  is  entered.  But  this  section  does  not  declare  the  effect  of 
such  a  judgment,  with  respect  to  the  application  of  any  statute  of 
limitation. 

Preferred  and  Deferred  Causes. 

§  791.  Preference  among  civil  actions. — Civil  causes  are  entitled 
to  preference  among  themselves,  in  the  trial  or  hearing  thereof,  in  the 
following  order,  next  after  the  causes  specified  in  the  last  section  but 
one : 

******* 

8.  An  action  against  a  corporation  founded  upon  a  note  or 
other  evidence  of  debt,  for  the  absolute  payment  of  money.  An 
action  upon  an  undertaking  given  upon  an  appeal  to  the  Court  of  Ap- 
peals or  to  stay  the  execution  on  an  appeal  to  the  Court  of  Appeals. 

Oaths  and  Affirmations. 

§  839.  Admission  by  member  of  corporation. — The  admission  of 
a  member  of  an  aggregate  corporation,  who  is  not  a  party,  shall  not 
be  received  as  evidence  against  the  corporation,  unless  it  was  made 
concerning  and  while  engaged  in  a  transaction  in  which  he  was  the 
authorized  agent  of  the  corporation. 

Documentary  Evidence. 

§  929.  Book  of  foreign  corporation;  when  evidence. — Where  a 
party  wishes  to  prove  an  act  or  transaction  of  a  foreign  corporation, 
the  book  or  books  of  the  corporation  may  be  used  for  that  purpose, 
as  presumptive  evidence,  whether  any  or  all  of  the  parties  are  or  are 
not  members  of  the  corporation. 

§  930.  When  a  copy  thereof  is  evidence. — If  an  original  book  is 
not  produced  at  the  trial,  as  prescribed  in  the  last  section,  a  copy 


CODE  OF   CIVIL  PROCEDURE.  367 

thereof,  or  of  an  entry  therein,  verified  as  prescribed  in  the  next  section, 
may  be  used,  with  like  effect  as  the  original  book;  provided  that  the 
party,  intending  to  use  the  copy,  gives  the  adverse  party  at  least  ten 
days'  notice  of  his  intention,  specifying  briefly  the  nature  of  the  evi- 
dence proposed  to  be  given.  But  this  and  the  next  section  do  not 
apply,  where  the  foreign  corporation  is  a  party  to  the  action,  and 
seeks  to  prove  its  own  act  or  transaction,  in  its  own  behalf. 

§  931.  How  copy  to  be  verified. — The  copy  must  be  verified  by 
the  deposition,  taken  as  prescribed  by  law,  or  the  oral  testimony, 
taken  at  the  trial,  of  the  person  who  made  it,  or  of  a  person  who  has 
examined  and  compared  it  with  the  original  book,  or  the  entry  therein. 
The  witness  must  testify  that  the  copy  produced  is  correct;  that  he 
made  it,  or  compared  it  with  the  original;  and  that  he  then  knew  that 
the  original  book  so  copied,  or  containing  the  entry,  was  the  book  of 
the  corporation;  or  that  it  was  then  acknowledged  to  him  to  be  such, 
by  an  officer  or  receiver  of  the  corporation,  or  a  person  having  the 
custody  thereof,  naming  the  person  who  made  the  acknowledgment; 
and  he  must  specify  where,  and  in  whose  custody,  the  original  was 
then  kept. 

Actions. 

§  1775.     Complaint  in  actions  by  or  against  corporations. — In  an 

action  brought  by  or  against  a  corporation,  the  complaint  must  aver 
that  the  plaintiff,  or  the  defendant,  as  the  case  may  be,  is  a  corpora- 
tion; must  state  whether  it  is  a  domestic  corporation  or  a  foreign 
corporation;  and,  if  the  latter,  the  state,  country  or  government,  by 
or  under  whose  laws  it  was  created.  But  the  plaintiff  need  not  set 
forth,  or  specially  refer  to,  any  act  or  proceeding,  by  or  under  which 
the  corporation  was  created. 

§  1776.     When  proof  of  corporate  existence  unnecessary. — In  an 

action,  brought  by  or  against  a  corporation,  the  plaintiff  need  not 
prove,  upon  the  trial,  the  existence  of  the  corporation,  unless  the 
answer  is  verified,  and  contains  an  affirmative  allegation  that  the 
plaintiff,  or  the  defendant,  as  the-  case  may  be,  is  not  a  corporation. 

§  1777.  Misnomer,  when  waived. —  In  an  action  or  special  pro- 
ceeding, brought  by  or  against  a  corporation,  the  defendant  is  deemed 
to  have  waived  any  mistake  in  the  statement  of  the  corporate  name, 
unless  the  misnomer  is  pleaded  in  the  answer,  or  other  pleading  in 
the  defendant's  behalf. 

§  1778.  Action  against  a  corporation  upon  a  note,  etc.— In  an 
action  against  a  foreign  or  domestic  corporation,  to  recover  damages 
for  the  non-payment  of  a  promissory  note,  or  other  evidence  of  debt, 
for  the  absolute  payment  of  money,  upon  demand,  or  at  a  particular 
time,  an  order,  extending  the  time  to  answer  or  demur,  shall  not  be 
granted,  except  by  the  court,  upon  notice  to  the  plantiff's  attor- 
ney. In  such  an  action,  unless  the  defendant  serves,  with  a  copy  of 
his  answer  or  demurrer,  a  copy  of  an  order  of  a  judge,  directing  that 
the  issues  presented  by  the  pleadings  be  tried,  the  plaintiff  may  take 
judgment,  as  in  case  of  default  in  pleading,  at  the  expiration  of  twenty 
days  after  service  of  a  copy  of  the  complaint,  either  personally  with 
tjie  summons,  or  upon  the  defendant's  attorney,  pursuant  to  his  de- 


368  NEW   YORK    CORPORATIONS. 

mand  therefor;  or,  if  the  service  of  the  summons  was  otherwise  than 
personal,  at  the  expiration  of  twenty  days  after  the  service  is  com- 
plete. 

§  1779.  When  foreign  corporation  may  sue. — An  action  may  be 
maintained  by  a  foreign  corporation,  in  like  manner,  and  subject  to 
the  same  regulations,  as  where  the  action  is  brought  by  a  domestic 
corporation,  except  as  otherwise  specially  prescribed  by  law.  But 
a  foreign  corporation  can  not  maintain  an  action,  founded  upon  an 
act,  or  upon  a  liability  or  obligation,  express  or  implied,  arising  out 
of,  or  made  and  entered  into  in  consideration  of,  an  act,  which  the 
laws  of  the  State  forbid  a  corporation  or  association  of  individuals 
to  do,  without  express  authority  of  law.  This  section  does  not  affect 
the  validity  of  a  meeting  of  the  stockholders  or  directors  of  a  foreign 
corporation,  held  within  the  State,  where  such  a  meeting  is  authorized 
by  the  laws  of  the  state,  country,  or  government,  by  or  under  which 
the  corporation  is  created,  or  of  an  act,  done  at  such  a  meeting, 
which  is  not  in  conflict  with  the  same  laws,  or  the  laws  of  the  State. 

§  1780.  When  foreign  corporation  may  be  sued. — An  action 
against  a  foreign  corporation  may  be  maintained  by  a  resident  of  the 
State,  or  by  a  domestic  corporation,  for  any  cause  of  action.  An 
action  against  a  foreign  corporation  may  be  maintained  by  another 
foreign  corporation,  or  by  a  non-resident,  in  one  of  the  following  cases 
only: 

1.  Where    the    action    is    brought    to    recover    damages    for    the 
breach  of  a  contract,  made  within  the  State,  or  relating  to  property 
situated  within  the  State,  at  the  time  of  the  making  thereof. 

2.  Where  it  is  brought  to  recover  real  property  situated  within 
the  State,  or  a  chattel,  which  is  replevied  within  the  State. 

3.  Where  the  cause  of  action  arose  within  the  State,  except  where 
the  object  of  the  action  is  to  affect  the  title  to  real  property  situated 
without  the  State. 

Judicial  Supervision. 

§  1781.  Action  against  directors,  etc.,  of  a  corporation,  for  mis- 
conduct.— An  action  may.be  maintained  against  one  or  more  trustees, 
directors,  managers,  or  other  officers  of  a  corporation,  to  procure  a 
judgment  for  the  following  purposes,  or  so  much  thereof  as  the  case 
requires: 

1.  Compelling  the  defendants  to  account  for  their  official  con- 
duct, in  the  management  and  disposition  of  the  funds  and  property, 
committed  to  their  charge. 

2.  Compelling  them  to  pay  to  the  corporation,  which  they  rep- 
resent, or  to  its  creditors,  any  money,  and  the  value  of  any  property, 
which  they  have  acquired  to  themselves,  or  transferred  to  others,  or 
lost,  or  wasted,  by  a  violation  of  their  duties. 

3.  Suspending  a  defendant  from  exercising  his  office,  where  it 
appears  that  he  has  abused  his  trust. 

4.  Removing  a  defendant  from  his  office,  upon  proof  or  convic- 
tion of  misconduct,  and  directing  a  new  election  to  be  held  by  the 
body  or  board  duly  authorized  to  hold  the  same,  in  order  to  supply 
the  vacancy  created  by  the  removal;  or,  where  there  is  no  such  body 
or  board,  or  where  all  the  members  thereof  are  removed,  directing 
the  removal  to  be  reported  to  the  governor,  who  may,  with  the  advice 
and  consent  of  the  senate,  fill  the  vacancies. 


CODE  OF   CIVIL  PROCEDURE.  369 

5.  Setting  aside  an  alienation  of  property,  made  by  one  or  more 
trustees,  directors,  managers,  or  other  officers  of  a  corporation,  con- 
trary to  a  provision  of  law,  or  for  a  purpose  foreign  to  the  lawful 
business  and  objects  of  the  corporation,  where  the  alienee  knew  the 
purpose  of  the  alienation. 

6.  Restraining   and    preventing   such    an    alienation,   where   it   is 
threatened,  or  where  there  is  good  reason  to  apprehend  that  it  will 
be  made. 

§  1782.  By  whom  action  to  be  brought. — An  action  may  be 
brought,  as  prescribed  in  the  last  section,  by  the  attorney-general  in 
behalf  of  the  people  of  the  state,  or,  except  where  the  action  is 
brought  for  the  purpose  specified  in  subdivision  third  or  fourth  of 
that  section,  by  a  creditor  of  the  corporation,  or  by  a  trustee,  director, 
manager,  or  other  officer  of  the  corporation,  having  a  general  superin- 
tendence of  its  concerns. 

§  1783.  This  article,  how  construed. — This  article  does  not  divest 
or  impair  any  visitatorial  power  over  a  corporation,  which  is  vested 
by  statute  in  a  corporate  body,  or  a  public  officer. 

Dissolution  and  Receivers.* 

§  1784.     Action   by   judgment   creditor    for   sequestration,    etc. — 

Where  final  judgment  for  a  sum  of  money  has  been  rendered  against 
a  corporation  created  by  or  under  the  laws  of  the  state,  and  an  exe- 
cution issued  thereupon  to  the  sheriff  of  the  county,  where  the  cor- 
poration transacts  its  general  business,  or  where  its  principal  office 
is  located,  has  been  returned  wholly  or  partly  unsatisfied,  the  judg- 
ment creditor  may  maintain  an  action  to  procure  a  judgment  seques- 
trating the  property  of  the  corporation,  and  providing  for  a  distribu- 
tion thereof,  as  prescribed  in  section  1793  of  this  act. 

§  1785.  Action  to  dissolve  a  corporation. — In  either  of  the  fol- 
lowing cases,  an  action  to  procure  a  judgment,  dissolving  a  corpora- 
tion, created  by  or  under  the  laws  of  the  State,  and  forfeiting  its  cor- 
porate rights,  privileges  and  franchises,  may  be  maintained,  as  pre- 
scribed in  the  next  section : 

1.  Where   the    corporation    has    remained   insolvent   for   at   least 
one  year. 

2.  Where  it  has  neglected  or  refused,  for  at  least  one  year,  to 
pay  and  discharge  its  notes  or  other  evidences  of  debt. 

3.  Where  it  has  suspended  its  ordinary  and  lawful  business  for 
at  least  one  year. 

4.  If  it  has  banking  powers,  or  power  to  make  loans  on  pledges 
or   deposits,  or  to   make   insurances,   where   it   becomes   insolvent   or 
unable  to  pay  its  debts,  or  has  violated  any  provision  of  the  act,  by 
or  under  which  it  was  incorporated,  or  of  any  other  act  binding  up- 
on it. 

§  1786.  Id.;  by  whom  to  be  brought. — An  action,  specified  in  the 
last  section,  may  be  maintained  by  the  attorney-general,  in  the  name 
and  in  behalf  of  the  people.  And  whenever  a  creditor  or  stockholder 
of  any  corporation  submits  to  the  attorney-general  a  written  state- 
ment of  facts,  verified  by  oath,  showing  grounds  for  an  action  under 
the  provisions  of  the  last  section,  and  the  attorney-general  omits 
for  sixty  days  after  this  submission,  to  commence  an  action  specified 

*See  also  Birdseye's  Rev.  Statutes,  Third  Edition,  "  Corporations," 
§  110  et  seq. 


37°  NEW   YORK    CORPORATIONS. 

in  the  last  section,  then,  and  not  otherwise,  such  creditor  or  stock- 
holder may  apply  to  the  proper  court  for  leave  to  commence  such 
an  action,  and  on  obtaining  leave  may  maintain  the  same  accordingly. 

§  1787.  Temporary  injunction. — In  an  action,  brought  as  pre- 
scribed in  this  article,  the  court  may,  upon  proof  of  the  facts  au- 
thorizing the  action  to  be  maintained,  grant  an  injunction  order,  re- 
straining the  corporation,  and  its  trustees,  directors,  managers,  and 
other  officers,  from  collecting  or  receiving  any  debt  or  demand,  and 
from  paying  out,  or  in  any  way  transferring  or  delivering,  to  any 
person,  any  money,  property,  or  effects  of  the  corporation,  during  the 
pendency  of  the  action;  except  by  express  permission  of  the  court. 
Where  the  action  is  brought  to  procure  the  dissolution  of  the  cor- 
poration, the  injunction  may  also  restrain  the  corporation,  and  its 
trustees,  directors,  managers,  and  other  officers,  from  exercising  any 
of  its  corporate  rights,  privileges,  or  franchises,  during  the  pendency 
of  the  action;  except  by  express  permission  of  the  court.  The  pro- 
visions of  title  second  of  chapter  seventh  of  this  act,  relating  to  the 
granting,  vacating,  or  modifying  of  an  injunction  order,  apply  to  an 
injunction  order,  granted  as  prescribed  in  this  section;  except  that  it 
can  be  granted  only  by  the  court. 

§  1788.  Receiver  may  be  appointed.  Permanent  and  temporary 
receiver.  Powers,  etc,  of  temporary  receiver. — In  such  an  action,  the 
court  may  also,  at  any  stage  thereof,  appoint  one  or  more  receivers 
of  the  property  of  the  corporation.  A  receiver,  so  appointed  before 
final  judgment,  is  a  temporary  receiver,  until  final  judgment  is  en- 
tered. A  temporary  receiver  has  power  to  collect  and  receive  the 
debts,  demands,  and  other  property  of  the  corporation;  to  preserve 
the  property,  and  the  proceeds  of  the  debts  and  demands  collected; 
to  sell,  or  otherwise  dispose  of,  the  property,  as  directed  by  the 
court;  to  collect,  receive,  and  preserve  the  proceeds  thereof;  and  to 
maintain  any  action  or  special  proceeding,  for  either  of  those  pur- 
poses. He  must  qualify  as  prescribed  by  law,  for  the  qualification 
of  a  permanent  receiver.  Unless  additional  powers  are  specially  con- 
ferred upon  him,  as  prescribed  in  the  next  section,  a  temporary  re- 
ceiver has  only  the  powers  specified  in  this  section,  and  those  which 
are  incidental  to  the  exercise  thereof.  A  receiver,  appointed  by  or  pur- 
suant to  a  final  judgment  in  the  action,  or  a  temporary  receiver  who 
is  continued  by  the  final  judgment,  is  a  permanent  receiver,  and  has 
all  the  powers  and  authority  conferred,  and  is  subject  to  all  the 
duties  and  liabilities  imposed  upon  a  receiver  appointed  upon  the 
voluntary  dissolution  of  a  corporation. 

§  1790.  Making  stockholders,  etc.,  parties. — Where  the  action  is 
brought  by  a  creditor  of  a  corporation,  and  the  stockholders,  direc- 
tors, trustees,  or  other  officers,  or  any  of  them,  are  made  liable  by 
law,  in  any  event  or  contingency,  for  the  payment  of  his  debt,  the 
persons,  so  made  liable,  may  be  made  parties  defendant,  by  the  original 
or  by  a  supplemental  complaint;  and  their  liability  may  be  declared 
and  enforced  by  the  judgment  in  the  action. 

§  1791.  When  separate  action  may  be  brought  against  them. — 
Where  the  stockholders,  directors,  trustees,  or  other  officers  of  a 
corporation,  who  are  made  liable,  in  any  event  or  contingency,  for 
the  payment  of  a  debt,  are  not  made  parties  defendant,  as  prescribed 


CODE  OF   CIVIL  PROCEDURE.  371 

in  the  last  section,  the  plaintiff  in  the  action  may  maintain  a  separate 
action  against  them,  to  procure  a  judgment,  declaring,  apportioning, 
and  enforcing  their  liability. 


§  1794.  Judgment;  stock  subscriptions  to  be  recovered. — Where 
the  stockholders  of  the  corporation  are  parties  to  the  action,  if  the 
property  of  the  corporation  is  not  sufficient  to  discharge  its  debts,  the 
interlocutory  or  final  judgment,  as  the  case  requires,  must  adjudge 
that  each  stockholder  pay  into  court  the  amount  due  and  remaining 
unpaid,  on  the  shares  of  stock  held  by  him,  or  so  much  thereof  as  is 
necessary  to  satisfy  the  debts  of  the  corporation. 

§  1795.  Id.;  as  to  liabilities  of  directors  and  stockholders. — If  it 
appears,  that  the  property  of  the  corporation,  and  the  sums  collected 
or  collectible  from  the  stockholders,  upon  their  stock  subscription, 
are  or  will  be  insufficient  to  pay  the  debts  of  the  corporation,  the 
court  must  ascertain  the  several  sums,  for  which  the  directors,  trus- 
tees, or  other  officers,  or  the  stockholders  of  the  corporation,  being 
parties  to  the  action,  are  liable;  and  must  adjudge  that  the  same  be 
paid  into  court,  to  be  applied,  in  such  proportions  and  in  such  order 
as  justice  requires,  to  the  payment  of  the  debts  of  the  corporation. 

§  1796.  Effect  of  this  article  limited. — This  article  does  not  re- 
peal or  affect  any  special  provision  of  law,  prescribing  that  a  par- 
ticular kind  of  corporation  shall  cease  to  exist,  or  shall  be  dissolved, 
in  a  case  or  in  a  manner,  not  prescribed  in  this  article;  or  any  special 
provision  of  law,  prescribing  the  mode  of  enforcing  the  liability  of  the 
stockholders  of  a  particular  kind  of  corporation. 

Dissolution. 

§  1797.     Action  by  attorney-general,  when  legislature  directs. — 

The  attorney-general,  whenever  he  is  so  directed  by  the  legislature, 
must  bring  an  action  against  a  corporation  created  by  or  under  the 
laws  of  the  state,  to  procure  a  judgment,  vacating  or  annulling  the 
act  of  incorporation,  or  any  act  renewing  the  corporation,  or  continu- 
ing its  corporate  existence,  upon  the  ground  that  the  act  was  pro- 
cured upon  a  fraudulent  suggestion,  or  the  concealment  of  a  material 
fact,  made  by  or  with  the  knowledge  and  consent  of  any  of  the  per- 
sons incorporated. 

§  1798.  Id.;  by  leave  of  court. — Upon  leave  being  granted,  as 
prescribed  in  the  next  section,  the  attorney-general  may  bring  an 
action  against  a  corporation  created  by  or  under  the  laws  of  the 
state,  to  procure  a  judgment,  vacating  the  charter  or  annulling  the 
existence  of  the  corporation,  upon  the  ground  that  it  has,  either 

1.  Offended  against  any  provision  of  an  act,  by  or  under  which 
it  was  created,  altered  or  renewed,  or  an  act  amending  the  same,  and 
applicable  to  the  corporation;  or, 

2.  Violated   any  provision   of  law,  whereby  it  has  forfeited  its 
charter,  or  become  liable  to  be  dissolved,  by  the  abuse  of  its  pow- 
ers; or, 

3.  Forfeited  its  privileges  or  franchises,  by  a  failure  to  exercise 
its  powers;  or, 

4.  Done  or  omitted  any  act,  which  amounts  to  a  surrender  of  its 
corporate  rights,  privileges,  and  franchises;  or, 

5.  Exercised  a  privilege  or  franchise,  not  conferred  upon  it  by 
law. 


372  NEW   YORK   CORPORATIONS. 

§  1799.  Leave;  when  and  how  granted. — Before  granting  leave, 
the  court  may,  in  its  discretion,  require  such  previous  notice  of  the 
application  as  it  thinks  proper,  to  be  given  to  the  corporation,  or 
any  officer  thereof,  and  may  hear  the  corporation  in  opposition 
thereto. 

§  1800.  Action  triable  by  a  jury. — An  action,  brought  as  pre- 
scribed in  this  article,  is  triable,  of  course  and  of  right,  by  a  jury,  as 
if  it  was  an  action  specified  in  section  968  of  this  act,  and  without 
procuring  an  order,  as  prescribed  in  section  970  of  this  act. 

§  1801.  Judgment. — Where  any  of  the  matters,  specified  in  sec- 
tion 1797  or  section  1798  of  this  act,  are  established  in  an  action, 
brought  as  prescribed  in  either  of  those  sections,  the  court  may  render 
final  judgment  that  the  corporation,  and  each  officer  thereof,  be  per- 
petually enjoined  from  exercising  any  of  its  corporate  rights,  privi- 
leges, and  franchises;  and  that  it  be  dissolved.  The  judgment  must 
also  provide  for  the  appointment  of  a  receiver,  the  taking  of  an  ac- 
ount,  and  the  distribution  of  the  property  of  the  corporation,  among 
Is  creditors  and  stockholders,  as  where  a  corporation  is  dissolved 
upon  its  voluntary  application,  as  prescribed  in  chapter  seventeenth 
of  this  act. 

§  1802.  Injunction  may  issue. — In  an  action,  brought  as  pre- 
scribed in  this  article,  an  injunction  order  may  be  granted,  at  any 
stage  of  the  action,  restraining  the  corporation,  and  any  or  all  of  its 
directors,  trustees  and  other  officers,  from  exercising  any  of  its  cor- 
porate rights,  privileges,  or  franchises;  or  from  exercising  certain  of 
its  corporate  rights,  privileges,  or  franchises,  specified  in  the  injunc- 
tion order;  or  from  exercising  any  franchise,  liberty,  or  privilege,  or 
transacting  any  business,  not  allowed  by  law.  Such  an  injunction  is 
deemed  one  of  those  specified  in  section  603  of  this  act,  and  all 
the  provisions  of  title  second  of  chapter  seventh  of  this  act,  appli- 
cable to  an  injunction  specified  in  that  section,  apply  to  an  injunction 
granted  as  prescribed  in  this  section,  except  that  it  can  be  granted 
only  by  the  court. 

§  1803.  Copy  of  judgment-roll  to  be  filed  and  published. — Where 
final  judgment  is  rendered  against  a  corporation,  in  an  action,  brought 
af  prescribed  in  this  article,  the  attorney-general  must  cause  a  copy 
of  the  judgment-roll  to  be  forthwith  filed  in  the  office  of  the  secretary 
of  state;  who  must  cause  a  notice  of  the  substance  and  effect  of  the 
judgment,  to  be  published,  for  four  weeks,  in  the  newspaper  printed 
at  Albany,  in  which  legal  notices  are  required  to  be  published,  and 
also  in  a  newspaper  printed  in  the  county,  wherein  the  principal  place 
of  business  of  the  corporation  was  located. 

§  1804.  Certain  corporations  excepted  from  certain  articles  of 
this  title. — Articles  second,  third,  and  fourth  of  this  title  do  not  apply 
to  a  religious  corporation;  or  to  a  municipal  or  other  political  cor- 
poration, created  by  the  constitution,  or  by  or  under  the  laws  of  this 
state;  or  to  any  corporation  which  the  regents  of  the  university  have 
power  to  dissolve,  except  upon  the  application  of  the  regents,  or  of 
the  trustees  of  such  a  corporation;  and  in  aid  of  its  liquidation  under 
such  dissolution. 

§  1805.  Officers  and  agents  may  be  compelled  to  testify. — In  an 
action,  brought  as  prescribed  in  article  second,  third,  or  fourth  of 


CODE  OF   CIVIL  PROCEDURE.  373 

this  title,  a  stockholder,  officer,  alienee,  or  agent  of  a  corporation, 
is  not  excused  from  answering  a  question,  relating  to  the  manage- 
ment of  the  corporation,  or  the  transfer  or  disposition  of  its  property, 
on  the  ground  that  his  answer  may  expose  the  corporation  to  a 
forfeiture  of  any  of  its  corporate  rights,  or  will  convict  him  of  a 
criminal  offence,  or  to  subject  him  to  a  penalty  or  forfeiture.  But 
his  testimony  shall  not  be  used,  as  evidence  against  him,  in  a  criminal 
action  or  special  proceeding. 

§  1806.  Injunction  staying  actions  by  creditors. — In  such  an  ac- 
tion, the  court  may,  in  its  discretion,  on  the  application  of  either 
party,  at  any  stage  of  the  action,  before  or  after  final  judgment,  and 
with  or  without  security,  grant  an  injunction  order,  restraining  the 
creditors  of  the  corporation  from  bringing  actions  against  the  de- 
fendants, or  any  of  them,  for  the  recovery  of  a  sum  of  money,  or 
from  taking  any  further  proceedings  in  such  actions,  theretofore 
commenced.  Such  an  injunction  has  the  same  effect,  and,  except  as 
otherwise  expressly  prescribed  in  this  section,  is  subject  to  the  same 
provisions  of  law,  as  if  each  creditor,  upon  whom  it  is  served,  was 
named  therein,  and  was  a  party  to  the  action  in  which  it  is  granted. 

§  1807.     Creditors  may  be  brought  in. — In   such   an   action,   the 

court  may,  at  any  stage  of  the  action,  before  or  after  final  judgment, 
make  an  order  requiring  all  the  creditors  of  the  corporation  to  ex- 
hibit and  prove  their  claims,  and  thereby  make  themselves  parties 
to  the  action,  in  such  a  manner,  and  in  such  a  reasonable  time,  not 
less  than  six  months  from  the  first  publication  of  notice  of  the 
order,  as  the  court  directs;  and  that  the  creditors,  who  make  default 
in  so  doing,  shall  be  precluded  from  all  benefit  of  the  judgment  and 
from  any  distribution  which  may  be  made  thereunder,  except  as  here- 
inafter provided.  Notice  of  the  order  must  be  given  by  publication, 
in  such  newspapers,  and  for  such  a  length  of  time,  as  the  court  directs. 
Notwithstanding  such  an  order  any  such  creditor  who  shall  exhibit 
and  prove  his  claim  in  the  manner  directed  thereby,  with  proof,  by 
affidavit  or  otherwise,  that  he  has  had  no  notice  or  knowledge  thereof 
in  time  to  comply  therewith,  any  time  before  an  order  is  made 
directing  a  final  distribution  of  the  assets  of  such  corporation,  shall 
be  entitled  to  have  his  claim  received,  and  shall  have  the  same  rights 
and  benefits  thereon,  so  far  as  the  assets  of  such  corporation  then 
remaining  undistributed  may  render  possible,  as  if  his  claim  had 
been  exhibited  and  proved  within  the  time  limited  by  such  order. 

§  1808.  When  attorney-general  must  bring  action. — Where  the 
attorney-general  has  good  reason  to  believe,  that  an  action  can  be 
maintained  in  behalf  of  the  people  of  the  state,  as  prescribed  in  article 
second,  third,  or  fourth  of  this  title,  except  section  1797  of  this  act, 
he  must  bring  an  action  accordingly,  or  apply  to  a  competent  court 
for  leave  to  bring  an  action,  as  the  case  requires;  if,  in  his  opinion, 
the  public  interests  require  that  an  action  should  be  brought.  In  a 
case  where  the  action  can  be  brought  only  by  the  attorney-general 
in  behalf  of  the  people,  if  a  creditor,  stockholder,  director,  or  trustee 
of  the  corporation,  applies  to  the  attorney-general  for  that  purpose, 
and  furnishes  the  security  required  by  law,  the  attorney-general  must 
bring  the  action,  or  apply  for  leave  to  bring  it,  if  he  has  good  rea- 
son to  believe  that  it  can  be  maintained.  Where  such  an  application 
is  made,  section  1986  of  this  act  applies  thereto,  and  to  the  action 
brought  in  pursuance  thereof. 


374  NEW   YORK    CORPORATIONS. 

§  1809.  Requisites  of  injunction  against  corporations  in  certain 
cases. — An  injunction  order,  suspending  the  general  and  ordinary  busi- 
ness of  a  corporation,  or  of  a  joint-stock  association,  consisting  of 
seven  or  more  persons,  or  suspending  from  office,  or  restraining  from 
the  performance  of  his  duties,  a  trustee,  director,  or  other  officer 
thereof,  can  be  granted  only  by  the  court,  upon  notice  of  the  appli- 
cation therefor,  to  the  proper  officer  of  the  corporation  or  associa- 
tion, or  to  the  trustee,  director,  or  other  officer  enjoined.  If  such  an 
injunction  order  is  made,  otherwise  than  as  prescribed  in  this  section, 
it  is  void. 

§  1810.  Id.;  of  order  appointing  receiver  in  certain  cases. — A  re- 
ceiver of  the  property  of  a  corporation  can  be  appointed  only  by  the 
court,  and  in  one  of  the  following  cases: 

1.  An  action,  brought  as  prescribed  in  article  second,  third  or 
fourth  of  this  title. 

2.  An   action   brought  for  the   foreclosure   of  a  mortgage   upon 
the  property,  of  which  the  receiver  is  appointed,  where  the  mortgage 
debt,  or  the  interest  thereupon,  has  remained  unpaid,  at  least  thirty 
days  after  it  was  payable,  and  after  payment  thereof  was  duly  demand- 
ed of  the  proper  officer  of  the  corporation  and  where  either  the  income 
of  the  property  is   specifically  mortgaged,   or  the   property  itself  is 
probably  insufficient  to  pay  the  mortgage  debt. 

3.  An   action   brought   by  the   attorney-general,   or  by   a   stock- 
holder, to  preserve  the  assets  of  a  corporation,  having  no  officer  em- 
powered to  hold  the  same. 

4.  A  special  proceeding  for  the  voluntary  dissolution  of  a  cor- 
poration. 

5.  Upon  the  application  of  the  regents  of  the  university,  in  aid 
of  the  liquidation  of  a  corporation  whose  dissolution  they  contemplate 
or  have  decreed;   or  upon  the  application   of  the  trustees  of  such   a 
corporation,  with  notice  to  the  regents. 

Where  the  receiver  is  appointed  in  an  action,  otherwise  than  by 
or  pursuant  to  a  final  judgment,  notice  of  the  application  for  his 
appointment  must  be  given  to  the  proper  officer  of  the  corporation. 

§  1811.  Id.;  of  judicial  suspension  or  removal  of  an  officer.— 
A  trustee,  director,  or  other  officer  of  a  corporation  shall  not  be  sus- 
pended or  removed  from  office,  by  a  court  or  judge,  otherwise  than 
by  the  final  judgment  of  a  competent  court,  in  an  action  brought  by 
the  attorney-general,  as  prescribed  in  section  1781  of  this  act. 

§  1812.  Application  of  the  last  three  sections. — The  last  three 
sections  apply  to  an  action  or  special  proceeding,  against  a  corpora- 
tion, or  joint-stock  association  created  by  or  under  the  laws  of  the 
state,  or  a  trustee,  director,  or  other  officer  thereof;  or  against  a 
corporation,  or  joint-stock  association,  created  by  or  under  the  laws 
of  another  state,  government,  or  country,  or  a  trustee,  director,  or 
other  officer  thereof,  where  the  corporation  or  association  does  busi- 
ness within  the  state,  or  has,  within  the  state,  a  business  agency  or 
a  fiscal  agency,  or  an  agency  for  the  transfer  of  its  stock. 

§  1813.  In  action  against  stockholders,  misnomer,  etc.,  not  avail- 
able.— Where  an  action,  authorized  by  a  law  of  the  state,  is  brought 
against  one  or  more  persons,  as  stockholders  of  a  corporation  or 
joint-stock  association,  an  objection  to  any  of  the  proceedings  cannot 
be  taken,  by  a  person  properly  made  a  defendant  in  the  action  on  the 
ground  that  the  plaintiff  has  joined  with  him,  as  a  defendant  in  the 


CODE  OF  CIVIL  PROCEDURE.  375 

action,  a  person,  whose  name  appears  on  the  stock-books  of  the  cor- 
poration or  association,  as  a  stockholder  thereof,  by  the  name  so  ap- 
pearing; but  who  is  misnamed,  or  dead,  or  is  not  liable  for  any  cause. 
In  such  a  case,  the  court  may,  at  any  time  before  final  judgment, 
upon  motion  of  either  party,  amend  the  pleadings  and  other  papers, 
without  prejudice  to  the  previous  proceedings,  by  substituting  the  true 
name  of  the  person  intended,  or  by  striking  out  the  name  of  the  per- 
son who  is  dead,  or  not  liable,  and,  in  a  proper  case,  inserting  the 
name  of  his  representative  or  successor. 

Actions  in  Behalf  of  the  People. 

§  1948.  Attorney-general  may  maintain  action. — The  attorney- 
general  may  maintain  an  action,  upon  his  own  information,  or  upon 
the  complaint  of  a  private  person,  in  either  of  the  following  cases: 

I.  Against  a  person  who  usurps,  intrudes  into,  or  unlawfully 
holds  or  exercises,  within  the  State,  a  franchise,  or  a  public  office, 
civil  or  military,  or  an  office  in  a  domestic  corporation.  *  *  * 

3.  Against  one  or  more  persons  who  act  as  a  corporation,  within 
the   State,   without   being  duly  incorporated;   or   exercise   within   the 
State,  any  corporate  rights,  privileges,  or  franchises,  not  granted  to 
them  by  the  law  of  the  State. 

4.  Against    a    foreign    corporation    which    exercises    within    the 
State  any  corporate  rights,  privileges  or  franchises,  not  granted  to  it 
by  the  law  of  this  State;  or  which  within  the  State,  has  violated  any 
provision  of  law,  or,  contrary  to  law,  has  done  or  omitted  any  act, 
or  has  exercised  a  privilege  or  franchise,  not   conferred  upon   it  by 
the  law  of  this  State,  where,  in  a  similar  case,  a  domestic  corpora- 
tion would  in  accordance  with  section  seventeen  hundred  and  ninety- 
eight  of  this  act,  be  liable  to  an  action  to  vacate  its  charter  and  to 
annul    its    existence;    or   which    exercises   within   the    State   any   cor- 
porate rights,  privileges   or  franchises   in   a  manner   contrary  to   the 
public  policy  of  the  State. 

Proceedings  to  Change  Name. 

§  2411.  Petition  by  corporation. — A  petition  to  assume  another 
corporate  name  may  be  made  by  a  domestic  corporation,  whether  in- 
corporated by  a  general  or  special  law,  to  the  Supreme  Court  at  a 
special  term  thereof,  held  in  the  judicial  district  in  which  its  princi- 
pal business  office  shall  be  situated,  or,  if  it  be  other  than  a  stock 
corporation,  at  a  special  term  held  in  the  judicial  district  in  which  its 
certificate  of  incorporation  is  filed  or  recorded,  or  in  which  its  prin- 
cipal property  is  situated,  or  in  which  its  principal  operations  are  or 
theretofore  have  been  conducted.  If  it  be  a  banking,  insurance  or  rail- 
road corporation,  the  petition  must  be  authorized  by  a  resolution  of 
the  directors  of  the  corporation,  and  approved  if  a  banking  corpora- 
tion, by  the  superintendent  of  banks;  if  an  insurance  corporation,  by 
the  superintendent  of  insurance,  and  if  a  railroad  corporation,  by  the 
board  of  railroad  commissioners.  The  petition  to  change  the  name 
of  any  other  corporation  must  have  annexed  thereto  a  certificate  of 
the  Secretary  of  State,  that  the  name  which  such  corporation  pro- 
poses to  assume  is  not  the  name  of  any  other  domestic  corporation 
or  a  name  which  he  deems  so  nearly  resembling  it,  as  to  be  calculated 
to  deceive. 


NEW   YORK   CORPORATIONS. 


§  2412.  Contents  of  petition.  —  The  petition  must  be  in  writing, 
signed  by  the  petitioner  and  verified  in  like  manner  as  a  pleading  in 
a  court  of  record,  and  must  specify  the  grounds  of  the  application, 
*  *  *  if  the  petitioner  be  a  corporation,  its  present  name,  and  the 
name  it  proposes  to  assume,  which  must  not  be  the  name  of  any 
other  corporation,  or  a  name  so  nearly  resembling  it  as  to  be  calcu- 
lated to  deceive;  and  if  it  be  a  railroad  corporation,  a  corporation 
having  banking  powers  or  the  power  to  make  loans  upon  pledges  or 
deposits,  or  to  make  insurances,  that  the  petition  has  been  duly  au- 
thorized by  a  resolution  of  the  directors  of  the  corporation  and 
approved  by  the  proper  officer. 

§  2413.  Notice  of  presentation  of  petition.  —  *  *  *If  the  petition 
be  made  by  a  corporation  located  elsewhere  than  in  the  city  and 
county  of  New  York,  notice  of  the  presentation  thereof  shall  be  pub- 
lished once  in  each  week  for  six  successive  weeks  in  the  state  paper, 
and  in  a  newspaper  of  every  county  in  which  such  corporation  shall 
have  a  business  office,  or  if  it  has  no  business  office,  of  the  county  in 
which  its  principal  corporate  property  is  situatedr  or  in  which  its 
operations  are  or  theretofore  have  been  principally  conducted,  which 
newspaper,  if  it  be  a  banking  corporation,  shall  be  designated  by  the 
superintendent  of  banks,  if  an  insurance  corporation,  other  than  a 
town  or  county  co-operative  insurance  corporation,  by  the  superin- 
tendent of  insurance,  or  if  a  railroad  corporation,  by  the  railroad 
commissioners.  Tn  the  city  and  county  of  New  York  -such  notice 
shall  be  published  once  in  each  week  for  six  successive  weeks  in  two 
daily  newspapers  published  in  such  county.  If  the  petition  be  made 
by  a  corporation,  a  copy  of  the  petition  and  notice  of  motion  shall 
be  filed  with  the  Secretary  of  State,  and  the  proposed  name  shall 
thereupon  be  reserved  for  said  corporation  until  six  weeks  after  the 
date  of  such  motion,  and  until  six  weeks  after  the  date  of  any  ad- 
journment of  such  motion  if  notice  of  such  adjournment  shall  be 
filed  with  the  Secretary  of  State,  and  no  certificate  of  incorporation 
of  a  proposed  corporation,  having  the  same  name  as  the  name  pro- 
posed in  such  petition,  or  a  name  so  nearly  resembling  it  as  to  be 
calculated  to  deceive,  shall  be  filed  in  any  office  for  the  purpose  of 
effecting  its  incorporation,  and  no  corporation  formed  without  the 
State  of  New  York  having  the  same  name  or  a  name  so  nearly  re- 
sembling it  as  to  be  calculated  to  deceive  shall  be  given  authority  to 
do  business  in  this  State. 

§  2414.  Order.  —  If  the  court  to  which  the  petition  is  presented 
is  satisfied  thereby,  or  by  the  affidavit  and  certificate  presented  there- 
with, that  the  petition  is  true,  and  that  there  is  no  reasonable  objec- 
tion to  the  change  of  name  proposed,  *  *  *  and,  if  the  petitioner  be 
a  corporation,  that  the  petition  has  been  duly  authorized  and  that 
notice  of  the  presentation  of  the  petition,  if  required  by  law,  has 
been  made,  the  court  shall  make  an  order  authorizing  the  petitioner 
to  assume  the  name  proposed  on  a  day  specified  therein,  not  less  than 
thirty  days  after  the  entry  of  the  order.  The  order  shall  be  directed 
to  be  entered  and  the  papers  on  which  it  was  granted,  to  be  filed 
within  ten  days  thereafter  *  *  *  or,  if  the  petitioner  be  a  corporation, 
in  the  office  of  the  clerk  of  the  county  in  which  its  certificate  of  in- 
corporation, if  any,  shall  be  filed;  or  if  there  be  none  filed  in  which 
its  principal  office  shall  be  located,  or  if  it  has  no  business  office,  in 
the  county  in  which  its  principal  property  is  situated,  or  in  which  its 
operations  are  or  theretofore  have  been  principally  conducted,  or  in 


CODE  OF   CIVIL  PROCEDURE.  3/7 

the  office  of  the  clerk  of  the  county  in  which  the  special  term  grant- 
ing the  order  is  held;  and,  if  the  petitioner  be  a  corporation,  that  a 
certified  copy  of  such  order  shall,  within  ten  days  after  the  entry 
thereof,  he  filed  in  the  office  of  the  Secretary  of  State;  and,  also,  if  it 
be  a  banking  corporation,  in  the  office  of  the  superintendent  of  banks, 
or  if  it  be  an  insurance  corporation,  in  the  office  of  the  superintendent 
of  insurance,  or  if  it  be  a  railroad  corporation,  in  the  office  of  the 
board  of  railroad  commissioners.  Such  order  shall  also  direct  the 
publication,  within  ten  days  after  the  entry  thereof  of  a  copy  thereof 
in  a  designated  newspaper,  in  the  county  in  which  the  order  is 
directed  to  be  entered,  at  least  once  if  the  petitioner  be  an  individual, 
or  if  the  petitioner  be  a  corporation,  once  in  each  week  for  four  suc- 
cessive weeks.  The  county  clerk,  in  whose  office  an  order  changing 
the  name  of  a  corporation  is  entered,  shall  record  the  same  at  length 
in  the  book  kept  in  his  office  for  recording  certificates  of  incorpora- 
tion. 

§  2415.  When  change  to  take  effect. — If  the  order  shall  be  fully 
complied  with,  and  within  forty  days  after  the  making  of  the  order, 
an  affidavit  of  the  publication  thereof  shall  be  filed  and  recorded  in 
the  office  in  which  the  order  is  entered,  and  in  each  office  in  which 
certified  copies  thereof  are  required  to  be  filed,  if  any,  the  petitioner 
shall,  on  and  after  the  day  specified  for  that  purpose  in  the  order,  be 
known  by  the  name  which  is  thereby  authorized  to  be  assumed,  and 
by  no  other  name.  No  proceedings  heretofore  had  under  sections 
two  thousand  four  hundred  and  fourteen  and  two  thousand  four  hun- 
dred and  fifteen  of  the  Code  of  Civil  Procedure  for  the  change  of 
the  name  of  a  corporation,  shall  be  invalid  by  reason  of  the  non- 
filing  of  an  affidavit  of  the  publication  of  the  order  changing  such 
name  within  twenty  days  from  the  date  thereof. 

Voluntary  Dissolution. 

§  2419.  When  a  majority  of  directors,  etc.,  may  petition  for  dis- 
solution.— If  a  majority  of  the  directors,  trustees,  or  other  officers, 
having  the  management  of  the  concerns  of  a  corporation  created  by 
or  under  the  laws  of  the  state,  discover  that  the  stock,  effects,  and 
other  property  thereof  are  not  sufficient  to  pay  all  just  demands,  for 
which  it  is  liable,  or  to  afford  a  reasonable  security  to  those  who 
may  deal  with  it;  or  if,  for  any  reason,  they  deem  it  beneficial  to  the 
interests  of  the  stockholders,  that  the  corporation  should  be  dissolved; 
they  may  present  a  petition,  to  the  supreme  court,  praying  for  a  final 
order  dissolving  the  corporation,  as  prescribed  in  this  title. 

§  2420.  Id.;  when  they  are  equally  divided. — If  a  corporation, 
created  under  a  general  statute  of  the  state  for  the  formation  of  cor- 
porations, or  under  any  special  act  or  charter,  has  an  even  number  of 
trustees  or  directors,  who  are  equally  divided  respecting  the  manage- 
ment of  its  affairs,  or  if  the  stock  of  such  corporation  is  equally  di- 
vided into  not  more  than  two  independent  ownerships  or  interests, 
or  if  the  entire  stock  of  the  corporation  is,  at  that  time,  owned  by 
the  trustees,  or  directors,  who  are  even  in  number  or  equally  divided, 
representing  the  management  of  its  affairs,  or  if  the  stock  is  so  di- 
vided, that  one-half  thereof  is  owned  or  controlled  by  persons  favor- 
ing the  course  of  part  of  the  trustees  or  directors,  and  one-half  thereof 
is  owned  by  persons  favoring  the  course  of  the  other  trustees  or 
directors,  the  trustees  or  directors  or  the  stockholders  or  one  or  more 
of  them,  may  present  a  petition  as  prescribed  in  the  last  section. 
And  it  shall  be  the  duty  of  a  majority  of  the  directors  or  trustees  of 


378  NEW    YORK   CORPORATIONS. 

every  corporation  created  by  or  under  the  laws  of  this  state  to  pre- 
sent a  petition  as  prescribed  in  the  last  section  whenever  directed 
so  to  do  by  a  majority  in  interest  of  its  stockholders.  But  this  sec- 
tion does  not  apply  to  a  savings  bank,  a  trust  company,  a  safe  deposit 
company,  or  a  corporation  formed  to  rent  safes  in  burglar  and  fire- 
proof vaults,  or  for  the  construction  or  operation  of  a  railroad,  or 
for  aiding  in  the  construction  thereof,  or  for  carrying  on  the  busi- 
ness of  banking  or  insurance,  or  intended  to  derive  a  profit  from  the 
loan  or  use  of  money. 

§  2421.  Contents  of  petition. — The  petition  must  show  that  the 
case  is  one  of  those  specified  in  the  last  two  sections,  and  must  state 
the  reasons,  which  induce  the  petitioner  or  petitioners  to  desire  the 
dissolution  of  the  corporation.  A  schedule  must  be  annexed  to  the 
petition,  containing  the  following  matters,  as  far  as  the  petitioner 
or  petitioners  know,  or  have  the  means  of  knowing  the  same: 

1.  A  full  and  true  account  of  all  the  creditors  of  the  corpora- 
tion, and  of  all   unsatisfied   engagements,   entered  into   by,   and   sub- 
sisting against,  the  corporation. 

2.  A    statement   of   the   name    and   place   of   residence   of   each 
creditor,  and   of   each   person   with   whom   such   an   engagement  was 
made,  and  to  whom  it  is  to  be  performed,  if  known;  or,  if  either  is 
riot  known,  a  statement  of  that  fact. 

3.  A  statement  of  the  sum  owing  to  each  creditor,  or  other  per- 
son specified  in  the  last  subdivision,  and  the  nature  of  each  debt,  de- 
mand or  other  engagement. 

4.  A  statement  of  the  true   cause  and   consideration  of  the   in- 
debtedness to  each  creditor. 

5.  A   full,  just,   and   true   inventory   of   all   the   property   of   the 
corporation,  and  of  all  the  books,  vouchers,  and  securities,   relating 
thereto. 

6.  A  statement  of  each  incumbrance  upon  the  property  of  the 
corporation,  by  judgment,  mortgage,  pledge,  or  otherwise. 

7.  A  full,  just  and  true  account  of  the  capital  stock  of  the  cor- 
poration, specifying  the  name  of  each  stockholder;   his  residence,  if 
it  is  known,  or  if  it  is  not  known,  stating  that  fact;  the  number  of 
shares  belonging  to  him;  the  amount  paid  in  upon  his  shares;  and  the 
amount  still   due  thereupon. 

§  2422.  Affidavit  to  be  annexed. — An  affidavit,  made  by  each  of 
the  petitioners,  to  the  effect  that  the  matters  of  fact,  stated  in  the 
petition  and  the  schedule,  are  just  and  true,  so  far  as  the  affiant 
knows  or  has  the  means  of  knowing  the  same,  must  be  annexed  to 
the  petition  and  schedule. 

§  2423.  Presentation  of  petition,  etc.  Order. — The  papers  must 
be  presented  at  a  special  term  of  the  supreme  court,  held  within  the 
judicial  district,  embracing  the  county  wherein  the  principal  office 
of  the  corporation  is  located.  In  a  case  specified  in  section  2420  of 
this  act,  the  court  may,  in  its  discretion,  entertain  or  dismiss  the 
application.  Where  it  entertains  the  application,  or  where  the  cause 
is  one  of  those  specified  in  section  2419  of  this  act,  the  court  must 
make  an  order,  requiring  all  persons  interested  in  the  corporation 
to  show  cause  before  it,  or  before  a  referee  designated  in  the  order, 
at  a  time  and  place  therein  specified,  not  less  than  three  months  after 
the  granting  of  the  order,  why  the  corporation  should  not  be  dis- 
solved. The  order  must  be  entered,  and  the  papers  must  be  filed, 
within  ten  days  after  the  order  is  made,  with  the  clerk  of  the  county 
where  the  principal  office  of  the  corporation  is  located.  If  it  shall 


CODE  OF   CIVIL  PROCEDURE.  379 

be  made  to  appear  to  the  satisfaction  of  the  court  that  the  corpora- 
tion is  insolvent,  the  court  may  at  any  stage  of  the  proceeding  before 
the  final  order,  on  motion  of  the  petitioners  on  notice  to  the  attorney- 
general,  or  on  motion  of  the  attorney-general  on  notice  to  the  cor- 
poration, appoint  a  temporary  receiver  of  the  property  of  the  cor- 
poration, which  receiver  shall  have  all  the  powers  and  be  subject  to 
all  the  duties  that  are  defined  as  belonging  to  temporary  receivers 
appointed  in  an  action,  in  section  one  thousand  seven  hundred  and 
eighty-eight  of  this  act.  The  court  may  also,  in  its  discretion,  at  any 
stage  in  the  proceeding  after  such  appointment  upon  like  motion  and 
notice,  confer  upon  such  temporary  receiver  the  powers  and  authority, 
and  subject  him  to  the  duties  and  liabilities  of  a  permanent  receiver, 
or  as  much  thereof  as  it  thinks  proper,  except  that  he  shall  not  make 
any  final  distribution  among  the  creditors  and  stockholders,  before 
final  order  in  the  proceedings,  unless  he  is  specially  directed  so  to 
do  by  the  court.  If  such  receiver  be  appointed,  the  court  may,  in  its 
discretion,  on  like  motion  and  notice,  with  or  without  security,  at 
any  stage  of  the  proceeding  before  the  final  order,  grant  an  injunc- 
tion, restraining  the  creditors  of  the  corporation,  from  beginning  any 
action  against  the  said  corporation  for  the  recovery  of  a  sum  of 
money,  or  from  taking  any  further  proceedings  in  such  an  action 
theretofore  commenced.  Such  injunction  shall  have  the  same  effect 
and  be  subject  to  the  same  provisions  of  law  as  if  each  creditor  upon 
whom  it  is  served  was  named  therein. 

§  2424.  Order  to  be  published. — A  copy  of  the  order  must  be 
published,  as  prescribed  therein,  at  least  once  in  each  of  the  three 
weeks  immediately  preceding  the  time  fixed  therein  for  showing 
cause,  in  the  newspaper  printed  at  Albany,  in  which  legal  notices  are 
required  to  be  published;  and  also  in  one  or  more  newspapers,  speci- 
fied in  the  order,  published  in  the  city  or  county  wherein  the  order 
is  entered. 

§  2425.  Id.;  to  be  served  on  creditors  and  stockholders. — A  copy 
of  the  order  must  also  be  served  upon  each  of  the  persons,  specified 
in  the  schedule  as  a  creditor  or  stockholder  of  the  corporation,  or 
as  a  person  to  whom  an  engagement  of  the  corporation  is  to  be  per- 
formed, other  than  a  person  whose  residence  is  stated  to  be  unknown, 
or  to  be  without  the  United  States.  The  service  must  be  made, 
either  personally,  at  least  twenty  days  before  the  time  appointed  for 
the  hearing;  or  by  depositing  a  copy  of  the  order,  at  least  forty  days 
before  the  time  so  appointed,  in  the  post-office,  inclosed  in  a  post- 
paid wrapper,  addressed  to  the  person  to  be  served,  at  his  residence, 
as  stated  in  the  schedule. 

§  2426.  Hearing. — At  the  time  and  place  specified  in  the  order, 
or  at  the  time  and  place  to  which  the  hearing  is  adjourned,  the  court, 
or  the  referee,  must  hear  the  allegations  and  proofs  of  the  parties, 
and  determine  the  facts.  If  a  referee  was  not  designated  in  the 
order  to  show  cause,  the  court  may,  in  its  discretion,  appoint  a 
referee  when  or  after  the  order  is  returnable.  The  decision  of  the 
court,  or  the  report  of  the  referee,  must  be  in  writing,  and  must  be 
made  and  filed  with  all  convenient  speed.  It  must  contain  a  state- 
ment of  the  effects,  credits  and  other  property,  and  of  the  debts  and 
other  engagements,  of  the  corporation,  and  of  all  other  matters,  per- 
taining to  its  affairs. 

§  2427.  Id.;  original  papers  may  be  used. — The  court  or  the 
referee  is  entitled  to  use,  upon  the  hearing,  the  original  petition,  and 


380  NEW   YORK   CORPORATIONS. 

the  schedules  annexed  thereto;  and  the  clerk  must  transmit  them  ac- 
cordingly, upon  the  written  order  of  the  judge,  or  of  the  referee.  In 
that  case,  they  must  be  returned  with  the  decision  or  report.  The 
court  may,  at  any  stage  of  the  proceedings  before  final  order,  on  the 
application  of  the  petitioners,  or  a  majority  of  them,  or  on  the  appli- 
cation of  the  temporary  receiver,  grant  an  order  amending  the 
schedules  annexed  to  the  original  petition,  by  the  insertion  of  addi- 
tional items,  or  by  making  the  statements  or  inventory  fuller  and  in 
gi  eater  detail  than  as  originally  filed,  with  the  like  effect  as  though 
said  petition  and  schedules  had  been  originally  presented  and  filed  as 
amended. 

§  2428.  Application  for  final  order. — Where  the  hearing  is  before 
a  referee,  a  motion  for  a  final  order  must  be  made  to  the  court,  upon 
notice  to  each  person  who  has  made  himself  a  party  to  the  pro- 
ceedings, by  filing  with  the  clerk,  before  the  close  of  the  hearing,  a 
notice  of  his  appearance,  in  person  or  by  attorney,  specifying  a  post- 
office  within  the  state,  where  such  a  notice  may  be  served.  The 
notice  may  be  served  as  prescribed  in  this  act,  for  the  service  of  a 
paper  upon  an  attorney  in  an  action.  Where  the  hearing  was  be- 
fore the  court,  a  motion  for  a  final  order  may  be  made  immediately, 
or  at  such  a  time  and  upon  such  a  notice,  as  the  court  prescribes. 

§  2429.  Final  order. — Upon  an  application  for  a  final  order,  if  it 
appear  to  the  court  in  a  case  specified  in  section  twenty-four  hundred 
and  nineteen  of  this  act,  that  the  corporation  is  insolvent,  or,  in  a 
case  specified  either  in  that  section,  or  in  section  twenty-four  hundred 
and  twenty  of  this  act,  that,  for  any  reason  a  dissolution  of  the  cor- 
poration will  be  beneficial  to  the  interests  of  the  stockholders  not 
injurious  to  the  public  interests,  the  court  must  make  a  final  order, 
dissolving  the  corporation,  and  appointing  one  or  more  receivers  of 
its  property.  But  in  the  case  of  a  solvent  corporation,  the  court  may 
if  there  is  no  objection  by  creditors,  dispense  with  a  receiver  and 
provide  in  the  final  order  for  the  distribution  of  the  assets.  Upon  the 
entry  of  the  order  the  corporation  is  dissolved.  The  court  may,  in 
its  discretion,  appoint  a  director,  trustee,  or  other  officer,  or  a  stock- 
holder of  the  corporation,  a  receiver  of  its  property.  In  a  proceed- 
ing for  the  voluntary  dissolution  of  a  corporation  the  court  may,  in 
the  furtherance  of  justice,  upon  notice  to  the  attorney-general,  and 
the  attorney-general  not  objecting,  and  upon  such  further  notice  to 
creditors  or  others  interested  as  the  court  shall  direct,  which  notice 
may  be  made  by  mail  upon  all  persons  and  corporations  not  residing 
or  existing  within  the  state,  relieve  a  receiver  from  any  omission, 
defect  or  default,  in  any  proceeding  or  act  required  by  law  to  be  taken 
or  done,  or  in  the  giving  of  any  notice  required  by  law  to  be  given, 
and  the  court  may  upon  like  notice,  confirm  any  act  of  a  receiver, 
and  any  decision,  report,  order  or  judgment  made  in  such  pro- 
ceeding. 

§  2430.  Certain  sales,  etc.,  void. — A  sale, 'assignment,  mortgage, 
conveyance,  or  other  transfer,  of  any  property  of  a  corporation,  made 
after  the  filing  of  a  petition  as  prescribed  in  this  title,  in  payment  of, 
or  as  security  for,  an  existing  or  prior  debt,  or  for  any  other  con- 
sideration; or  a  judgment  thereafter  rendered  against  the  corpora- 
tion by  confession,  or  upon  the  acceptance  of  an  offer,  is  absolutely 
void,  as  against  the  receiver  appointed  in  the  special  proceeding,  and 
as  against  the  creditors  of  the  corporation. 


CODE  OF   CIVIL  PROCEDURE.  381 

§  2431.  Certain  corporations  excepted  from  this  title. — This  title 
does  not  apply  to  an  incorporated  library  society,  to  a  religious  cor- 
poration, or  to  a  select  school  or  academy,  incorporated  by  the 
regents  of  the  university  or  by  the  legislature,  or  to  a  municipal  or 
other  political  corporation.  In  case  of  corporations  affected  by  the 
provisions  of  this  title,  and  not  having  stockholders,  it  shall  be  suffi- 
cient for  the  purposes  of  this  title  to  notify,  name  and  refer  to  the 
"members"  of  such  corporations  instead  of  "stockholders"  as  herein 
provided. 

Miscellaneous. 

§  2865.  Actions  by  and  against  officers,  etc. — An  action,  cogniz- 
able by  a  justice  of  the  peace,  may  be  brought  by  or  against  a  cor- 
poration; *  *  * 

§  2879.  Service  of  summons  upon  a  corporation. — Where  the  de- 
fendant to  be  served  is  a  corporation,  or  person,  company  or  part- 
nership doing  business  in  another  county  than  that  in  which  he  or  it 
resides,  the  summons  may  be  personally  served  upon  it  or  him  by 
delivering  a  copy  thereof  to  an  officer,  managing  agent  or  person  to 
whom  a  copy  of  the  summons  in  an  action  brought  against  the  cor- 
poration in  the  Supreme  Court  might  be  delivered  as  prescribed  in 
sections  four  hundred  and  thirty-one  and  four  hundred  and  thirty- 
two  of  this  act,  or,  to  any  director,  managing  agent  or  trustee  of  the 
corporation,  person,  partnership  or  company  by  whatever  official  title 
he  or  it  is  called. 

§  3268.  When  defendant  may  require  security  for  costs. — The  de- 
fendant, in  an  action  brought  in  a  court  of  record,  may  require  se- 
curity for  costs  to  be  given,  as  prescribed  in  this  title,  where  the 
plaintiff  was,  when  the  action  was  commenced,  either  *  *  * 

2.     A  foreign  corporation;  *  *  * 

§  3343.  Miscellaneous  general  definitions  and  rules  of  construc- 
tion.— In  construing  this  act,  the  following  rules  must  be  observed, 
except  where  a  contrary  intent  is  expressly  declared  in  the  provision 
to  be  construed,  or  plainly  apparent  from  the  context  thereof: 


18.  A  "domestic  corporation"  is  a  corporation  created  by  or  un- 
der the  laws  of  the  State;  or  located  in  the  State,  and  created  by  or 
under  the  laws  of  the  United  States,  or  by  or  pursuant  to  the  laws 
in  force  in  the  colony  of  New  York,  before  the  ipth  day  of  April,  in 
the  year  seventeen  hundred  and  seventy-five.  Every  other  corpora- 
tion is  a  "foreign  corporation." 


PENAL  CODE. 


PROVISIONS  AFFECTING  CORPORATIONS. 

§  41  f.  Refusal  to  permit  employes  to  attend  election. — A  person 
or  corporation  who  refuses  to  an  employe  entitled  to  vote  at  an  elec- 
tion or  town  meeting,  the  privilege  of  attending  thereat,  as  provided 
by  the  election  law,  or  subjects  such  employe  to  a  penalty  or  reduction 
of  wages  because  of  the  exercise  of  such  privilege,  is  guilty  of  a  mis- 
demeanor. 

§  384!.  Payment  of  wages. — A  corporation  or  joint  stock  associa- 
tion or  a  person  carrying  on  the  business  thereof,  by  lease  or  other- 
wise, who  does  not  pay  the  wages  of  its  employes  in  cash,  weekly  or 
monthly  as  provided  in  article  one  of  the  labor  law,  is  guilty  of  a 
misdemeanor,  and  upon  conviction  therefor,  shall  be  fined  not  less 
than  twenty-five  nor  more  than  fifty  dollars  for  each  offense. 

§  518.  Officer  of  corporation  selling,  etc.,  shares. — An  officer, 
agent  or  other  person  employed  by  any  company  or  corporation  ex- 
isting under  the  laws  of  this  State,  or  of  any  other  state  or  territory 
of  the  United  States,  or  of  any  foreign  government,  who  willfully 
and  with  a  design  to  defraud,  sells,  pledges  or  issues,  or  causes  to  be 
sold,  pledged  or  issued,  or  signs  or  procures  to  be  signed  with  intent 
to  sell,  pledge  or  issue,  or  to  be  sold,  pledged  or  issued,  a  false, 
forged  or  fraudulent  paper,  writing  or  instrument,  being  or  purport-- 
ing to  be  a  scrip,  certificate  or  other  evidence  of  the  ownership  or 
transfer  of  any  share  or  shares  of  the  capital  stock  of  such  com- 
pany or  corporation,  or  a  bond  or  other  evidence  of  debt  of  such 
company  or  corporation,  or  a  certificate  or  other  evidence  of  the 
ownership  or  of  the  transfer  of  any  such  bond  or  other  evidence  of 
debt,  is  guilty  of  forgery  in  the  third  degree,  and  upon  conviction, 
in  addition  to  the  punishment  prescribed  in  this  title  for  that  offense, 
may  also  be  sentenced  to  pay  a  fine  not  exceeding  three  thousand 
dollars. 

§  519.  Falsely  indicating  person  as  corporate  officer. — The  false 
making  or  forging  of  an  instrument  or  writing,  purporting  to  have 
been  issued  by  or  in  behalf  of  a  corporation  or  association,  state  or 
government,  and  bearing  the  pretended  signature  of  any  person,  there- 
in falsely  indicated  as  an  agent  or  officer  of  such  corporation,  is  for- 
gery in  the  same  degree  as  if  that  person  were  in  truth  such  officer 
or  agent  of  the  corporation  or  association,  state  or  government. 

§  590.  Frauds  in  the  organization  of  corporations. — A  person 
who: 

382 


PENAL  CODE.  383 

1.  Without  authority  subscribes  the  name  of  another  to  or  in- 
serts the  name  of  another  in  any  prospectus,  circular  or  other  adver- 
tisement or  announcement  of  any  corporation  or  joint  stock  associ- 
ation  existing  or  intended  to  be  formed,  with  intent  to  permit  the 
same  to  be  published,  and  thereby  to  lead  persons  to  believe  that  the 
person  whose  name  is  so  subscribed  is  an  officer,  agent,  member  or 
promoter  of  such  corporation  or  association;  or, 

2.  Signs  the  name  of  a  fictitious  person  to  any  subscription  for, 
or    agreement    to    take    stock    in    any    corporation,    existing    or    pro- 
posed; or, 

3.  Signs  to  any  such  subscription  or  agreement  the  name  of  any 
person,  knowing  that  such  person  does  not  intend  in  good  faith  to 
comply  with  the  terms  thereof,  or  under  any  understanding  or  agree- 
ment, that  the  terms  of  such  subscription  or  agreement  are  not  to  be 
complied  with  or  enforced; 

Is  guilty  of  a  misdemeanor. 

§  591.  Fraudulent  issue  of  stock,  scrip,  etc. — An  officer,  agent  or 
other  person  in  the  service  of  any  joint  stock  company  or  corpora- 
tion formed  or  existing  under  the  laws  of  this  State,  or  of  the  United 
States  or  of  any  state  or  territory  thereof,  or  of  any  foreign  govern- 
ment or  country,  who  willfully  and  knowingly,  with  intent  to  defraud, 
either: 

1.  Sells,    pledges    or   issues,    or    causes    to    be    sold,    pledged    or 
issued,  or  signs  or  executes,  or  causes  to  be  signed  or  executed  with 
intent  to  sell,  pledges  or  issues  or  causes  to  be  sold,  pledged  or  issued, 
any  certificate  or  instrument  purporting  to  be  a  certificate  or  evidence 
of  the  ownership  of  any  share  or  shares  of  such  company  or  corpora- 
tion, or  any  bond  or  evidence  of  debt,  or  writing  purporting  to  be  a 
bond  or  evidence  of  debt  of  such   company  or  corporation,  without 
being  first  thereto  duly  authorized  by  such  company  or  corporation, 
or  contrary  to  the  charter  or  laws  under  which  such  corporation  or 
company  exists,  or  in  excess  of  the  power  of  such  company  or  corpor- 
ation or  of  the  limit  imposed  by  law  or  otherwise  upon  its  power  to 
create  or  issue  stock  or  evidences  of  debt;  or 

2.  Reissues,   sells,   pledges   or   disposes   of,   or    causes   to   be   re- 
issued, sold,  pledged  or  disposed  of,  any  surrendered  or  canceled  cer- 
tificates, or  other  evidence  of  the  transfer  or  ownership  of  any  such 
share  or  shares,  is  punishable  by  imprisonment  for  a  term  not  ex- 
ceeding seven  years,  or  by  a  fine  not  exceeding  three  thousands  dol- 
lars, or  by  both. 

§  592.  Frauds  in  procuring  organization  of  corporation  or  in- 
crease of  capital. — An  officer,  agent  or  clerk  of  a  corporation,  or  of 
persons  proposing  to  organize  a  corporation,  or  to  increase  the  capital 
stock  of  a  corporation,  who  knowingly  exhibits  a  false,  forged  or 
altered  book,  paper,  voucher,  security  or  other  instrument  of  evidence 
to  any  public  officer  or  board  authorized  by  law  to  examine  the  or- 
ganization of  such  corporation,  or  to  investigate  its  affairs,  or  to 
allow  an  increase  of  its  capital,  with  intent  to  deceive  such  officer  or 
board  in  respect  thereto,  is  punishable  by  imprisonment  in  a  state 
prison  not  exceeding  ten  years. 

§  593.  Acting  for  foreign  corporations  not  authorized  to  do  busi- 
ness in  this  State. — Any  person,  or  corporation,  who  *  *  * 

2.  Acts  as  agent  or  representative  in  this  State  of  a  foreign  cor- 
poration, other  than  a  moneyed  corporation,  with  the  words  "trust," 


384  NEW    YORK    CORPORATIONS. 

"bank,"  "banking,"  "insurance,"  "assurance,"  "indemnity,"  "guaran- 
tee," "guaranty,"  "savings,"  "investment,"  "loan,"  "benefit,"  or  any 
other  words  or  terms  indicating,  representing  or  holding  out  such 
company  to  be  a  moneyed  corporation  as  a  part  of  its  name  or  cor- 
porate title,  or  who,  in  connection  with  such  corporation  or  other- 
wise, shall  put  forth  any  sign  containing  said  name,  or  who  shall  ad- 
vertise or  publish  the  said  company  as  doing  business  in  this  State, 
directly  or  indirectly,  through  agents  or  otherwise,  while  such  com- 
pany shall  not  be  authorized  under  a  certificate  procured  from  the 
Secretary  of  State  pursuant  to  section  fifteen  of  the  general  corpora- 
tion law  to  do  business  in  this  State,  is  guilty  of  a  misdemeanor. 
(L.  1904,  Ch.  489.) 

§  594.  Misconduct  of  directors  of  stock  corporations. — A  direc- 
tor of  a  stock  corporation,  who  concurs  in  any  vote  or  act  of  the 
directors  of  such  corporation,  or  any  of  them,  by  which  it  is  in- 
tended, 

1.  To  make  a. dividend,  except  from  the  surplus  profits  arising 
from  the  business  of  the  corporation,  and  in  the  cases  and  manner 
allowed  by  law;  or, 

2.  To  divide,  withdraw,  or  in  any  manner  pay  to  the  stockholders, 
or  any  of  them,  any  part  of  the  capital  stock  of  the  corporation;  or 
to  reduce  such  capital  stock  without  the  consent  of  the  legislature;  or 

3.  To  discount  or  receive  any  note  or  other  evidence  of  debt  in 
payment  of  an  instalment  of  capital  stock  actually  called  in,  and  re- 
quired to  be  paid,  or  with  intent  to  provide  the  means  of  making  such 
payment;  or 

4.  To   receive  or  discount  any  note  or   other  evidence   of  debt 
with  intent  to  enable  any  stockholder  to  withdraw  any  part  of  the 
money  paid  in  by  him  on  his  stock;  or 

5.  To  apply  any  portion  of  the  funds  of  such   corporation,  ex- 
cept surplus  profits,  directly  or  indirectly,  to  the  purchase  of  shares 
of  its  own  stock; 

Is  guilty  of  a  misdemeanor. 

§  608.  Unlawful  use  of  corporate  name  or  title. — Any  person,  as- 
sociation or  corporation,  other  than  a  moneyed  corporation,  who 
shall  within  this  State,  directly  or  indirectly,  or  through  agents  or 
representatives  transact  business  under,  or  in  anywise  use  a  corporate 
name  or  a  corporate  title  with  the  words  "trust,"  "bank,"  "banking," 
"insurance,"  "assurance,"  "indemnity,"  "guarantee,"  "guaranty,"  "sav- 
ings," investment,"  "loan,"  "benefit,"  as  a  part  of  such  name  or  title, 
is  guilty  of  a  misdemeanor;  provided,  however,  that  any  domestic 
corporation,  other  than  a  moneyed  corporation,  heretofore  duly  or- 
ganized and  heretofore  duly  authorized  by  law  to  use  and  at  the 
time  of  the  passage  of  this  act  lawfully  using  either  or  any  of  such 
words  as  a  part  of  its  lawful  corporate  title,  may  lawfully  continue 
to  use  such  corporate  title,  provided,  and  if  it,  being  a  corporation 
other  than  .a  moneyed  corporation,  shall,  wherever  the  name  shall 
be  printed,  written,  engraved  or  displayed,  add,  in  legible  English 
characters,  of  substantially  the  same  size  and  style  as  the  name, 
directly  under  the  said  name  or  immediately  in  connection  therewith, 
wherever  so  used,  the  words  "not  a  moneyed  corporation."  (L.  1004, 
Ch.  489.) 

§  610.  Misconduct  of  officers  and  directors  of  stock  corporations. 
— An  officer  or  director  of  a  stock  corporation  who: 


PENAL  CODE.  385 

1.  Issues,  participates  in  issuing,  or  concurs  in  a  vote  to  issue 
any  increase  of  its  capital  stock  beyond  the  amount  of  the  capital 
stock  thereof,  duly  authorized  by  or  in  pursuance  of  law;  or, 

2.  Sells,  or  agrees  to  sell,  or  is  directly  or  indirectly  interested 
in  the  sale  of  any  share  of  stock  of  such  corporation,  or  in  any  agree- 
ment to  sell  the  same,  unless  at  the  time  of  such  sale  or  agreement 
he  is  an  actual  owner  of  such  share; 

Is  guilty  of  a  misdemeanor,  punishable  by  imprisonment  for  not 
less  than  six  months,  or  by  a  fine  not  exceeding  five  thousand  dol- 
lars, or  by  both. 

§  611.  Misconduct  of  officers  and  employes  of  corporations. — A 
director,  officer,  agent  or  employe  of  any  corporation  or  joint  stock 
association  who : 

1.  Knowingly  receives  or  possesses  himself  of  any  of  its  prop- 
erty otherwise  than  in  payment  for  a  just  demand,  and  with  intent 
to  defraud,  omits  to  make  or  to  cause  or  direct  to  be  made,  a  full 
and  true  entry  thereof  in  its  books  and  accounts;  or, 

2.  Concurs  in  omitting  to  make  any  material  entry  thereof;  or, 

3.  Knowingly  concurs  in  making  or  publishing  any  written  re- 
port, exhibit  or  statement  of  its  affairs  or  pecuniary  condition,  con- 
taining any  material  statement  which  is  false;  or, 

4.  Having  the  custody  or  control  of  its  books,  willfully  refuses 
or  neglects  to  make  any  proper  entry  in  the  stock  book  of  such  cor- 
poration as  required  by  law,  or  to  exhibit  or  allow  the  same  to  be 
inspected  and  extracts  to  be  taken  therefrom  by  any  person  entitled 
by  law  to  inspect  the  same  or  to  take  extracts  therefrom;  or, 

5.  If  a  notice  of  an  application  for  an  injunction  affecting  the 
property  or  business  of  such  joint  stock  association   or  corporation 
is  served  upon  him,  omits  to  disclose  the  fact  of  such  service  and  the 
time  and  place  of  such  application  to  the  other  directors,  officers  and 
managers  thereof;  or, 

6.  Refuses  or  neglects  to  make  any  report  or  statement  lawfully 
required  by  a  public  officer; 

Is  guilty  of  a  misdemeanor. 

§  613.     Misconduct  of  corporate  elections. — Any  person  who: 

2.  Being  entitled  to  vote  at  any  meeting  of  the  stockholders  or 
bondholders  or  both  of  a  stock  corporation,  sells  his  vote,  or  who 
issues  a  proxy  to  vote  to  any  person  for  any  sum  of  money  or  thing 
of  value,  except  as  expressly  authorized  by  law;  or, 

3.  Acts   as   an   inspector   of   election   at   any   such   meeting,   and 
violates  an  oath  taken  by  him,  in  pursuance  of  law  as  such  inspector, 
or  violates  the  provisions  of  an  oath  required  by  law  to  be  taken  by 
him  as  such  inspector,  or  is  guilty  of  any  dishonest  or  corrupt  con- 
duct as  such  inspector; 

Is  guilty  of  a  misdemeanor. 

§  614.  Presumption  of  knowledge  of  corporate  condition  and 
business  and  of  assent  thereto  by  directors;  definition. — It  is  no  de- 
fense to  a  prosecution  for  a  violation  of  the  provisions  of  this  chap- 
ter, that  the  corporation  is  a  foreign  corporation,  if  it  carries  on  busi- 
ness or  keeps  an  office  therefor  in  this  State. 

The  term  "director"  as  used  in  this  chapter  includes  any  of  the 
persons  having,  by  law,  the  direction  or  management  of  the  affairs  of 
a  corporation,  by  whatever  name  described. 

A  director  of  a  corporation  or  joint  stock  association  is  deemed 


386 


NEW   YORK   CORPORATIONS. 


to  have  such  a  knowledge  of  the  affairs  of  the  corporation  or  asso- 
ciation as  to  enable  him  to  determine  whether  any  act,  proceeding 
or  omission  of  its  directors  is  a  violation  of  this  chapter.  If  present 
at  a  meeting  of  the  directors  at  which  any  act,  proceeding  or  omission 
of  such  directors  in  violation  of  this  chapter  occurs,  he  must  be 
deemed  to  have  concurred  therein,  unless  he  at  the  time  causes  or  in 
writing  requires  his  dissent  therefrom  to  be  entered  on  the  minutes 
of  the  directors.  If  absent  from  such  meeting,  he  must  be  deemed 
to  have  concurred  in  any  such  violation,  if  the  facts  constituting  such 
violation  appear  on  the  record  or  minutes  of  the  proceedings  of  the 
board  of  directors,  and  he  remains  a  director  of  the  corporation  for 
six  months  thereafter  without  causing  or  in  writing  requiring  his 
dissent  from  such  violation  to  be  entered  on  such  record  or  minutes. 


MISCELLANEOUS  STATUTORY   PROVIS- 
IONS AFFECTING  CORPORATIONS. 


Labor  Law.    L.  1897,  Ch.  415. 

§  9.  Cash  payment  of  wages. — Every  manufacturing,  mining, 
quarrying,  mercantile,  railroad,  street  railway,  canal,  steamboat,  tele- 
graph and  telephone  company,  every  express  company,  and  every 
water  company,  not  municipal,  shall  pay  to  each  employe  engaged  in 
its  business  the  wages  earned  by  him  in  cash.  No  such  company  or 
corporation  shall  pay  its  employes  in  scrip,  commonly  known  as  store 
money  orders. 

§  10.  When  wages  are  to  be  paid. — Every  corporation  or  joint 
stock  association,  or  person  carrying  on  the  business  thereof  by  lease 
or  otherwise,  shall  pay  weekly  to  each  employe  the  wages  earned  by 
him  to  a  day  not  more  than  six  days  prior  to  the  date  of  such  pay- 
ment. 

But  every  person  or  corporation  operating  a  steam  surface  rail- 
road shall,  on  or  before  the  twentieth  day  of  each  month,  pay  the 
employes  thereof  the  wages  earned  by  them  during  the  preceding 
calendar  month. 

§  ii.  Penalty  for  violation  of  preceding  sections. — If  a  corpora- 
tion or  joint  stock  association,  its  lessee  or  other  person  carrying 
on  the  business  thereof,  shall  fail  to  pay  the  wages  of  an  employe  as 
provided  in  this  article,  it  shall  forfeit  to  the  people  of  the  state  the 
sum  of  fifty  dollars  for  each  such  failure,  to  be  recovered  by  the  fac- 
tory inspector  in  his  name  of  office  in  a  civil  action;  but  an  action 
shall  not  be  maintained  therefor,  unless  the  factory  inspector  shall 
have  given  to  the  employer  at  least  ten  days'  written  notice,  that  such 
an  action  will  be  brought  if  the  wages  due  are  not  sooner  paid  as 
provided  in  this  article. 

On  the  trial  of  such  action,  such  corporation  or  association  shall 
not  be  allowed  to  set  up  any  defense,  other  than  a  valid  assignment 
of  such  wages,  a  valid  set-off  against  the  same,  or  the  absence  of  such 
employe  from  his  regular  place  of  labor  at  the  time  of  payment,  or 
an  actual  tender  to  such  employe  at  the  time  of  the  payment  of  the 
wages  so  earned  by  him,  or  a  breach  of  contract  by  such  employe  or 
a  denial  of  the  employment.  (See  also  L.  1895,  Ch.  791,  §  2.) 

An  Act  to  Prevent  Monopolies  in  Articles  or  Commodities  of  Com- 
mon Use,  and  to  Prohibit  Restraints  of  Trade 
and  Commerce,  *  *  *  L.  1899,  Ch.  690. 

§  i.  Every  contract,  agreement,  arrangement  or  combination 
whereby  a  monopoly  in  the  manufacture,  production  or  sale  in  this 
state  of  any  article  or  commodity  of  common  use  is  or  may  be  created, 

387 


388  NEW   YORK    CORPORATIONS. 

established  or  maintained,  or  whereby  competition  in  this  state  in  the 
supply  or  price  of  any  such  article  or  commodity  is  or  may  be  re- 
strained or  prevented,  or  whereby  for  the  purpose  of  creating,  estab- 
lishing or  maintaining  a  monopoly  within  this  state  of  the  manufac- 
ture, production  or  sale  of  any  such  article  or  commodity,  the  free 
pursuit  in  this  state  of  any  lawful  business,  trade  or  occupation  is  or 
may  be  restricted  or  prevented,  is  hereby  declared  to  be  against  public 
policy,  illegal  and  void. 

§  2.  Every  person  or  corporation,  or  any  officer  or  agent  thereof, 
who  shall  make  or  attempt  to  make  or  enter  into  any  such  contract, 
agreement,  arrangement  or  combination,  or  who  within  this  state 
shall  do  any  act  pursuant  thereto,  or  in,  toward  or  for  the  consum- 
mation thereof,  wherever  the  same  may  have  been  made,  is  guilty  of 
a  misdemeanor,  and  on  conviction  thereof  shall,  if  a  natural  person, 
be  punished  by  a  fine  not  exceeding  five  thousand  dollars,  or  by  im- 
prisonment for  not  longer  than  one  year,  or  by  both  such  fine  and 
imprisonment;  and  if  a  corporation,  by  a  fine  of  not  exceeding  five 
thousand  dollars. 

§  3.  The  attorney-general  may  bring  an  action  in  the  name  and 
in  behalf  of  the  people  of  the  state  against  any  person,  trustee,  director, 
manager  or  other  officer  or  agent  of  a  corporation,  or  against  a  cor- 
poration, foreign  or  domestic,  to  restrain  and  prevent  the  doing  in 
this  state  of  any  act  herein  declared  to  be  illegal,  or  any  act,  in,  to- 
ward or  for  the  making  or  consummation  of  any  contract,  agreement, 
arrangement  or  combination  herein  prohibited,  wherever  the  same 
may  have  been  made. 


GENERAL  INDEX. 


[References  are  to  pages.] 
[For  List  of  Forms,  see  Table  of  Contents.] 

A. 

Acceptance  of  Charter,  46. 

Subscriptions,  44,  78,  79,  80. 
Account,  Books  of.     (See  Books,  Corporate.) 
Acknowledgment,  Corporate,  227. 

Forms,  227. 
of  Charter,  35,  36. 
Forms,  178,  183. 
Statutes,  327. 
Actions  by  and  against  Corporations, 

By  Attorney  General, 

Code  Civ.  Pro.,  369,  371,  373, 

375- 

Constitutional    Rights    of    Cor- 
poration, 16. 
Contents  of  Complaint, 

Code  Civ.  Pro.,  367. 
Evidence  of  Books, 
Code  Civ.  Pro.,  366,  367. 
Stockholder, 
Code     Civ.     Pro., 

366. 
For  Dissolution, 

Code  Civ.  Pro.,  369-375. 
Not  Affected  by  Amendment  of 

Charter, 
Statutes,  327. 
Consolidation, 
Statutes,  298, 

299. 
Dissolution, 

Statutes,  321. 
Preferences  in, 

Code  Civ.  Pro.,  366. 

389 


39O  GENERAL  INDEX. 

[References  are  to  pages.] 

Actions  by  and  against  Corporations. — Continued 

Procedure  in, 

Code  Civ.  Pro.,  363,  367,  369- 

375- 
x  Service  of  Summons  or  Process, 

Code  Civ.  Pro.,  363,  364,  381. 
Stay  When  Collusively  Brought, 

Statutes,  333. 
To  Determine  Validity  of  Bonds, 

Statutes,  306. 
Upon  Note, 

Code  Civ.  Pro.,  367,  368. 
Directors  and  Officers,  122-124,  130-132. 

Code  Civ.  Pro.,  368,  369,  371. 
Foreign  Corporations,  167,  168,  172. 

Statutes,  329,  330;  Code  Civ.  Pro.,  368. 
Stockholders,  91-99,  122. 

On  Statutory  Liability,  96-98. 
Statutes,  319,  320;   Code   Civ. 

Pro.,  370,  371,  374,  375- 
Suit  on   Behalf  of   Corporation, 

92. 

Suit  to  Dissolve,  96. 
Adjournment,  of  Meetings,  47,  49,  55. 
Administrator,  Liability  as  Stockholder,  98. 

Statutes,  320. 
Admission  Made  by  Agent, 

Code  Civ.  Pro.,  366. 

Admission  to  State.     (See  Foreign  Corporations.) 
Adoption  of  By-Laws.     (See  By-Laws.) 
Affidavit,  Treasurer's,  228. 

Forms,  228. 

Agent  of  Foreign  Corporation.     (See  Foreign  Corporations.) 
Agent,  Transfer,  no. 
Agreement,     (See  Contracts.) 

For  Consolidation,  65,  66. 

Statutes,  296-299. 
For  Reorganization, 
Statutes,  304,  305. 
Underwriting, 

Forms,  274-276. 
Voting  Trust,  100,  101,  274. 
Forms,  273,  274. 
Statutes,  331. 


GENERAL  INDEX.  39! 

[References  are  to  pages.] 

Alteration  of  Charter  by  Legislature,  16. 

Statutes,  336. 

or  Extension  of  Business.     (See  Amendment  of  Charter.) 
Allowance  of  Charter,  37,  38,  44. 

Statutes,  326. 
Amended  and  Supplemental  Certificates,  72. 

Statutes,  326,  327. 

Amendment  of  By-Laws.     (See  By-Laws.) 
Amendment  of  Charter,  67-72.     (See  subheads.) 

Statutes,  326,  327. 
Fees,  67,  346,  347. 
Alteration  of  Business,  68. 

Statutes,  311. 

Change  of  Name,  29,  71,  72,  253,  254. 
Forms,  251-254. 
Code  Civ.  Pro.,  375-377- 
Change  of  Office,  70,  257. 
Forms,  255-257. 
Statutes,  322,  323. 

Classification  of  Stock,  31,  32,  70,  76. 
Forms,  258-260,  262-264. 
Statutes,  294,  316,  317. 
Extension  of  Corporate  Existence,  51,  70,  71. 

Statutes,  334,  335. 
Increase  or  Decrease  of  Capital  Stock,  68,  69, 

84,  85,  105,  261,  262,  264. 
Forms,  260-264. 
Statutes,  315,  316. 

Increase   or   Decrease   of   Number  of   Direc- 
tors, 69,  70,  1 1 6,  267. 
Forms,  265-268. 
Statutes,  307,  308. 
Increase  or  Decrease  of  Number  of  Shares, 

69,  77,  78. 
Statutes,  320. 
Informalities  or  Obvious  Defects,  72. 

Statutes,  327. 

Procedure  for,  68-72.     (See  also  special  sub- 
jects.) 

Statutes,  326. 
To   Secure   New   Purposes  of  Same   General 

Character,  68. 
Statutes,  311. 

Annual  Election.     (See  Election,  Annual.) 
Annual  Franchise  Tax.     (See  Franchise  Tax.) 


392  GENERAL   INDEX. 

[References  are  to  pages.] 

Annual  Meeting  of  Stockholders,  102-115.     (See  Election,  Annual;  also 

Meetings.) 
Forms,  210-213. 
Statutes,  307. 
Notice  of,  40,  104,  210. 

Forms,  210,  211. 
Place  of,  40,  102,  103. 
Quorum,  40,  106,  107,  no. 
Time,  40. 

Annual  Report.     (See  Reports.) 
Appointment  of  Officers  and  Agents,  58,  127. 

Statutes,  309,  328. 

Assent  of  Stockholders.     (See  Consent.) 
Assessment.     (See  Taxation.) 
Assets,  Sale  of  Entire,  93. 

Statutes,  311,  312. 
Assignment  of  Property,  When  Prohibited,  122. 

Statutes,  317. 

Stock,  86-88,  94,  95,  220-222. 
Forms,  220. 

Statutes,  309,  310,  313,  314. 
In  Blank,  86,  87,  220. 

Forms,  220. 
Attachment,  172. 

Code  Civ.  Pro.,  364-366. 
Attestation  of  Seal,  226. 

Forms,  226. 
Authority  of  Directors.     (See  Powers  of  Directors.) 

B. 

Bank  Deposits,  49,  230.     (See  By-Laws,  190,  198.) 

Forms,  229,  230. 
Banking  Powers  Prohibited,  30. 

Statutes,  330. 

Board  of  Directors.     (See  Directors.) 
Bond,  Corporate.     (See  Bond  Issues.) 
Indemnity,  82. 
Forms,  221. 
Treasurer's,  128. 
Forms,  277,  278. 
Statutes,  309. 


GENERAL  INDEX.  393 

[References  are  to  pages.] 

Bond  Issues,  62-64,  281,  282,  293. 

Statutes,  302,  303,  305,  306,  314. 
Forms,  281-293. 

Bond,  285,  286. 

Certificate  of  Consent,  283. 

Coupon,  286. 

Deed  of  Trust,  284-293. 

Directors'  Resolution,  284. 

Execution  of  Deed  of  Trust,  293. 

Stockholders'  Consent,  282. 

"  Resolution,  281. 

Trustee's  Certificate,  287. 
By  Reorganized  Corporation, 

Statutes,  304. 
Consideration  for  Issue,  82,  83. 

Statutes,  314. 
Conversion  into  Stock,  63,  64. 

Statutes,  303. 
Effect  of  Recitals  in  Mortgage,  63. 

Statutes,  305,  306. 
Effect  of  Recording  Mortgage, 

Statutes,  305,  306. 
Foreclosure, 

Statutes,  305;  Code  Civ.  Pro.,  374. 
Guarantee  by  Another  Corporation,  62,  64,  93. 

Statutes,  314. 
How  Authorized,  62,  63,  281. 

Statutes,  303. 
Procedure  for,  281-284. 
Books,  Corporate,  134-137,  171,  222,  223. 

Entries  in,  if  Proper,  Must  Be  Made,  131. 

Statutes,  310;  Pen.  Code,  385. 
Inspection  of,  95,  136,  137,  171. 

Statutes,  310,  319;   Pen.   Code,  385. 
of  Account,   134. 

Statutes,  309,  310. 
of  Foreign  Corporation,  171. 

Statutes,  319. 

Stock  Book  or  Ledger,  134-136,  222,  223. 
Forms,  224. 
Statutes,  309,  310,  319. 
Closing,   107,   109,  no. 

Statutes,   330,   331. 
Contents  of,  135. 
Statutes,  309,  310. 


394  GENERAL  INDEX. 

[References  are  to  pages.] 

Books,  Corporate. — Continued. 

Stock  Book  or  Ledger. — Continued. 

Proof    of    Right    to    Vote, 

107,  108,  112,  113,  115. 
Statutes,   330,   331. 
Transfer  Book,  222. 

Forms,  222. 
Closing,   107,   109,   no. 
Where  Kept,  134. 

Statutes,  309. 
Borrowing  Money,  62-64.     (See  Bond  Issues.) 

Statutes,  302,  303,  314. 

Business,  Alterations  or  Extension.     (See  Amendments.) 
Beginning,  50,  51. 

Statutes,  294,  295,  326,  334,  352. 
Business  Corporations,  17.     (See  Corporations.) 
Law,  17. 

Statutes,  294-301. 
By- Laws,  39-43,  46,  47,  5$,  130. 
Forms,  187-199. 
Statutes,  328,  334. 
Adoption  of,  41,  42,  46-48,  58. 
Amendment  of,  43. 
Certification  of, 

Forms,  199. 

Certified  Transcript  of,  230. 
Directors  Controlled  by,  40. 
Enforcement  of,  42. 
Force  as  to  Third  Persons,  130. 
Inspectors  of  Election,  Appointment  Prescribed  by,  40. 

Statutes,  309. 
Meetings  and  Elections  Regulated  by,  40. 

Statutes,  307,  328. 
Officers'  Powers  and  Duties  Prescribed  by,  41. 

Statutes,  309. 
Power  to  Make,  41,  58. 
Preparation  of,  39. 
Repeal,  43. 

Stockholders  Make,  41. 
Stock  Transfers  Regulated  by,  41. 
When  Directors  May  Make,  41,  43,  48. 

C. 

Calendar,  Corporate,  278,  279. 

Forms,  279,  280. 


GENERAL  INDEX.  395 

[References  are  to  pages.] 

Called  Meetings.     (See  Special  Meetings.) 
Calls,  103,  213,  215. 

Forms,  201,  202,  213,  215. 
Calls  and  Waivers,  45,  48,  104. 

Forms,  201,  202. 
Statutes,  336. 
Capital,  73- 

Initial,  32,  51. 

Statutes,  294. 
Capitalization,  74. 

Statutes,  294,  295. 

Capital  Stock,  31,  32,  41,  73-9°.     (See  Stock.) 
Amount,  74. 

Statutes,  294,  295. 

Classification  of.     (See  Classification.) 
Consideration  for  Issue,  82,  83. 

Statutes,  314. 
Employed  in  State,  139-142,  168-170. 

Statutes,  352,  353. 

Increase  or  Decrease.     (See  Increase.) 
Payment  of,  73,  74,  83,  230. 

Statutes,  295,  296,  314,   338. 
One-half,  73,  74,  230,  348. 
Forms,  231. 
Statutes,  295,  296,  338. 
When  to  be  Issued,  74. 
Withdrawal  Prohibited,  122. 

Statutes,  308. 

Certificate,  of  Authority,  Foreign  Corporation.     (See  Foreign  Corp'n.) 
of  Comptroller  for  Decrease  of  Capital  Stock,  85,  262. 

Statutes,  316,  347.  [72. 

of  Secretary  of  State  for  Change  of  Corporate  Name,  71, 

Statutes,  347;  Code  Civ.  Pro.,  375. 
Penalty  for  Making  False, 

Statutes,  310,  311. 
Certificate  of  Incorporation,  24-38,  178,  179,  186,  187. 

Forms,  176-186.  [344. 

Statutes,  294,  295,  326,  327,  337-339,  343, 
Acceptance  of,  46. 
Acknowledgment,  35,  36. 
Forms,  178,  183. 
Statutes,  327. 
Allowance  of,  37,  38. 

Statutes,  326. 

Alteration   or   Repeal   by   Legislature,   16. 
Statutes,  336. 


396  GENERAL  INDEX. 

[References  are  to  pages.] 

Certificate  of  Incorporation. — Continued. 

Amended  and  Supplemental,  72. 

Statutes,  326,  327. 
Amendment   of,  67-72.     (See   Amendment 

of  Charter.) 
Certified  Copy, 
Statutes,  326. 
Contents,  27-35. 

Statutes,  294,  295,  311. 
Capital  Stock,  Amount,  31,  32. 
Corporate  Name,  28,  29. 
Directors  for  First  Year,  33,  34. 
Duration,  33. 
Initial   Capital,  32,  51. 
Location  of  Principal  Office,  33. 
Purposes,  30.  31. 
Shares,  32. 
Subscribers,  34. 
Definition,  26. 

Statutes,  326. 
Electric  Light  Companies,  186. 

Statutes,  338,  339. 
English  Language,  Must  be  in,  27. 

Statutes,  326. 
Evidential  Value,  37. 

Statutes,  327. 
Execution  of,  35,  36,  179. 
Forms,  178,  183. 
Statutes,  294,  326. 
Fees,  21-23,  36,  37- 
Statutes,  346-348. 
Filing,  36,  37,  50. 

Statutes,  294,  295,  326. 

Forfeiture,  52-54-  [371- 

Statutes,  296,  334,  359;  Code  Civ.  Pro., 
Gas  Companies,  186. 
Statutes,  338,  339. 
Incorporators,  24-26. 

Statutes,  326. 
Qualifications  of,  24. 

Statutes,  326. 
Lost  or  Destroyed, 

Statutes,  327. 

Navigation  Companies,  186,  187. 
Statutes,  337,  338. 


GENERAL  INDEX.  397 

[References  are  to  pages.] 

Certificate  of  Incorporation. — Continued. 

Preparation  of,  26,  27,  178,  179. 
Recording,  36,  37,  50. 

Statutes,  294,  295,  326. 
Special  Provisions  in,  34,  35. 

Statutes,  295,  320,  325,  328,  330,  331. 
Subscribers  to,  34. 
Telegraph  or  Telephone   Companies,   187. 

Statutes,  343,  344. 
Certificates,  Forms  of,  Change  of  Office,  256,  257. 

Foreign  Corporation,  251. 
Classification  of  Stock,  258,  262-264. 
Consent  to  Mortgage,  Stockholders',  283. 
Incorporation,  176-186. 
Increase  of  Stock,  260-264. 
Inspectors  of  Election,  212,  213. 
Payment  of  One-half  Capital  Stock,  231. 
Secretary's,  228-230,  271,  272. 
Voluntary  Dissolution,  268-272. 
Certificates  of  Stock,  81,  82,  94. 

Forms,  218,  219. 
Statutes,  313,  314. 

Assignment  of,  86-88,  94,  95,  220-222. 
Forms,  220. 

Statutes,  309,   310,  313,  314. 
In  Blank,  86,  87,  220. 

Forms,  220. 
Common  Stock, 

Forms,  218. 
Lost  and  Destroyed,  82,  91,  94. 

Statutes,  318. 
Indemnity  Bond  for,  82. 

Forms,  221. 
Partly  Paid  Stock,  82. 

Statutes,  323. 
Preferred  Stock, 

Forms,  219. 
Signatures,  81. 

Forms,  218,  219. 
Transfer  Tax  on,  146-149.     (See  Taxation.) 

Statutes,  360-362. 
Certification  of  By-Laws,  230. 

Forms,  199. 


398  GENERAL  INDEX. 

[References  are  to  pages.] 

Certified  Minutes,  228. 

Forms,  228-230. 
Resolution,  230. 

Forms,  229,  230. 
Transcript  from  By-Laws,  230. 
Challenge  of  Stockholders  or  Proxy,  109,  112,  113. 

Statutes,  331,  332. 

Change  of  Business.     (See  Amendment  of  Charter. 
Name. 

Number  of  Directors. 
Number  of  Shares. 
Principal  Office. 

Charter.     (See  Certificate  of  Incorporation.) 
Charter  Powers.     (See  Powers.) 
Civil  Code.     (See  Code  of  Civil  Procedure.) 
Classification  of  Corporations,  17,  142-145. 

Statutes,  325.  [145. 

For  Purposes  of  Franchise  Tax,   142- 

Statutes,  353. 
Directors,  116,  117. 
Statutes,  307,  308. 
Statutes,  16-20. 
Stock,  31,  70,  74-78. 

Forms,  258-260,  262-264. 
Statutes,  294,  316,  317. 
Closing  Stock  Books  before  Meetings,  107,  109,  no. 

Statutes,  330,  331. 
Code  of  Civil  Procedure,  363-381. 
Combinations  in  Restraint  of  Trade, 

Statutes,  305,  388. 
Commencing  Business,  50,  51. 

Statutes,  294,  295,  326,  334,  352. 
Initial  Capital,  32,  51. 

Statutes,  294. 

Committees,  Standing,  49,  126. 
Common  Law,  20. 
Common  Stock,  74,  75. 

Forms,  218. 
Statutes,  316,  317. 
Exchange  of  Preferred  Stock  for,  76,  77. 

Statutes,  317. 

Compensation  of  Directors,  118,  133. 
Officers,  133. 


GENERAL  INDEX.  399 

[References  are  to  pages.] 

Comptroller's  Report,  161,  162,  171,  172,  233-240.     (See  Reports.) 
Forms,  233-240. 
Statutes,  354-357- 
Certificate  of  Reduction  of  Capital  Stock,  69,  262. 

Statutes,  316,  347. 
Condemnation  of  Property, 

Statutes,  300,  301. 
Conflicting  Corporate  Laws,  18. 

Statutes,  335,  336. 
Consent  Meetings,  45,  125. 

Statutes,  336. 
Consent  of  Stockholders,  102. 

To  Change  of  Principal  Office,  70. 
Forms,  255. 
Statutes,  322. 
Extend  Corporate  Existence,  70,  71. 

Statutes,  334,  335. 

Increase  Number  of  Directors,  69,  70. 
Forms,  268. 

Statutes,  307,  308.  [68,  69,  261. 

Increase  or  Reduction  of  Capital   Stock, 
Forms,  260,  261. 
Statutes,  315,  316. 
Mortgage,  62,  281,  282. 
Forms,  282. 

Statutes,  302,  303,  305,  306. 
Voluntary  Dissolution,  55. 

Forms,  270,  271. 
Statutes,  321. 
By    Incorporators, 

Statutes,  323. 
Consideration  for  Issue  of  Stock  or  Bonds,  82,  83. 

Statutes,  314. 
Must  be  Stated  in  Reports, 

Statutes,  314. 
Consolidation  of  Corporations,  65-67,  93. 

Statutes,  296-299,  326,  352. 
Agreement  for,  65,  66. 
Fees,  21,  66,  347. 

Procedure  for,  65,  66.  [67. 

Rights  of  Dissenting  Stockholders,  66, 
Constitutional  Provisions  Relating  to  Corporations,  15,  16. 
Construction  of  Laws,  18. 

Statutes,  335,  336. 


4OO  GENERAL  INDEX. 

[References  are  to  pages.] 

Contested  Elections,  113,  114. 

Statutes,  333. 

Contracts,  Directors,  120,  121. 
Officers,  129. 
Signatures  to,  131,  225-227. 

Forms,  225-227. 
Copyrights,  Deducted  from  Local  Tax  Assessment,  151,  156. 

Included  in  Franchise  Tax  Assessment,  140. 
Corporate  Acknowledgment,  227. 

Forms,  227. 

Books.     (See  Books,  Corporate.) 
Calendar,  278,  279. 
Forms,  279,  280. 

Contracts,  120,  121,  129,  131,  225-227. 
Endorsement,  227. 

Forms,  227. 
Existence,  33,  50-56,  70,  71. 

Statutes,  295,  296,  328,  334,  335. 
Extension  of,  51,  52,  70,  71,  93. 

Statutes,  334,  335. 
Name,  28,  29,  71,  72,  178. 

Statutes,  294,  326,  327. 
Change  of,  29,  71,  72,  253,  254. 
Forms,  251-254. 
Code  Civ.  Pro.,  375-377- 
Powers,  30,  31,  57-72.     (See  Powers  of  Corporations.) 

Statutes,  311,  328. 
Purposes,  30,  31. 

Statutes,  294,  311. 
Seal,  58,  59. 

Attestation  of, 
Forms,  226. 
Signatures,  131,  225,  226. 

Forms,  225-227. 
Corporations,  Business,  17. 

Definition  of,  15. 

Statutes,  325. 
Law,  294-301. 
Classification  of,  17,  142-145. 

Statutes,  325. 

Consolidation  of.     (See  Consolidation.) 
Dissolution  of.     (See  Dissolution.) 
Domestic, 

Statutes,  325;  Code  Civ.  Pro.,  381. 


GENERAL  INDEX.  4OI 

[References  are  to  pages.] 

Corporations,  Business. — Continued. 
Duration  of,  33,  51. 

Statutes,  295,  296,  328,  334,  335. 
Electric  Light,  186. 
Statutes,  338-343- 

Foreign,  164-172.     (See  Foreign  Corporations.) 
Formation  of,  15,  16,  24-50. 

Statutes,  294,  295,  337-339,  343,  344,  347- 
Fees,  22,  23,  36,  37. 
Tables,  23,  347,  348. 
Statutes,  326,  346,  352. 
Full  Liability,  97. 

Statutes,  296. 
Gas,  186. 

Statutes,  338-343- 
Limited  Liability,  96-98. 

Statutes,  319,  320. 
Limited  Powers,  Non-Stock  Corporation, 

Statutes,  328. 
Manufacturing,  145,  146. 
Merger  of,  67. 

Statutes,  322. 
Navigation,  186,  187. 

Statutes,  337,  338. 
Officers  of,  41,  122-124,  127-133. 

Statutes,  309. 
Offices  of,  33,  103,  134,  151,  163. 

Statutes,  294,  295,  322,  323. 
Purposes,  30,  31. 

Statutes,  294,  311. 
Reorganization  of,  21,  22,  65-67. 
Statutes,  295-298,  303-305,  326. 
Taxation  of,  138-159.     (See  Taxation.) 
Telegraph  or  Telephone,  187. 

Statutes,  343-345- 
Cost  of  Incorporation,  21-23,  36,  37-     (See  Fees  and  Taxation.) 

Statutes,  326,  346-348,  352. 
Creation  of  Corporations,  15,  16. 
Creditors,  Rights  Against  Directors  and  Officers,  123,  124,  130-132. 

Statutes,  308-312,  317,  323,  334. 
Stockholders,  96-98. 

Statutes,  312,  319,  320,  323. 
As  to  Transferred  Property,  122. 
Statutes,  317. 


4O2  GENERAL  INDEX. 

[References  are  to  pages.] 

Creditors,  Rights  Against  Directors  and  Officers. — Continued. 
On  Consolidation,  65,  66. 

Statutes,  298,  299. 
When  Laborers  or  Servants,  96,  97. 

Statutes,  317,  319,  320,  387. 
Cumulative  Voting,  no,  in. 

Statutes,  331. 

D. 

Debts,  50,  51,  62-64,  93,  140,  150,  154,  155. 

Statutes,  295,  302,  303,  310. 
Deduction  of,  in  Tax  Assessment,  140,  150,  154-156. 

Statutes,  350. 
Decrease  of  Capital  Stock,  69,  84,  85,  105,  262.     (See  Increase.) 

Statutes,  315,  316. 
Number  of  Shares,  69,  77,  78. 

Statutes,  320. 

Deed  of  Trust.     (See  Bond  Issues;  also  Mortgages.) 
Definitions  of  Corporate  Terms, 

Statutes,  325,  326;  Code  Civ.  Pro.,  381. 
Deposits,  Bank,  49,  230.     (See  By-Laws,  190,  197,  198.) 

Forms,  229,  230. 
Directors,  40,  116-126. 

Statutes,  307-312,  325. 
Action  Against,  122-124. 

Code  Civ.  Pro.,  368,  369,  371- 
Authority.     (See   Powers.) 
By-Laws,  Power  to  Make,  41,  48. 

Statutes,  328,  334. 
Power  to  Repeal,  43. 
Classification,  116,  117. 

Statutes,  307,  308. 
Compensation,  118,  133. 
Contracts  with  Corporation,  120,  121. 
Deemed  to  Have  Knowledge  of  Corporate  Proceedings,  123. 

Penal  Code,  385,  386. 
Dummy,  25,  26. 
Duties,  120,  121. 

Statutes,  333,  334,  336. 
Election,  40,  104,  105,  110-116.     (See  Election,  Annual.) 

Statutes,  307,  308,  309,  332,  333. 
Executive  Committee,  49,  126. 
Failure  to  Elect,  114. 
Statutes,  332. 


GENERAL   INDEX.  403 

[References  are  to  pages.] 

Directors. — Continued. 

Finance  Committee,  49,  126. 
For  First  Year,  33,  34. 

Statutes,  295. 
Holding  Over,  114,  118. 

Statutes,  308,  332. 
Liabilities,  121-124. 

Statutes,  308-312,  317,  323,  334,  370,  371;  Penal  Code,  384. 
Limitations  on,  40,   118,   119. 

Statutes,  295,  328. 
Majority  May  Act,  125. 

Statutes,  333,  334,  336. 
Meetings,  40,  47-49,  124-126.  (See  Meetings.) 

Forms,  202-204,  207-209,  214,  215. 

Statutes,  295. 
Misconduct  of,  Penalty, 

Penal  Code,  384,  385. 
Must  Act  as  Board,  119,  124,  125. 

Statutes,  333,  334,  336. 
Negligence  of,  121,  122. 
Number  of,  33,  34,  40,  116,  186,  187. 

Statutes,  295,  337,  339,  344. 
Change  of,  69,  70,  116,  267. 
Forms,  265-268. 
Statutes,  307,  308. 
Officers,  Appointment,  58,  127. 

Statutes,  309,  328. 
Removal,  132. 

Statutes,  309;  Code  Civ.  Pro.,  368,  374. 
Powers  of,  100,  118-120. 

Statutes,  295,  309,  328,  333,  334- 
Qualifications,  34,  40,  117. 

Statutes,  307,  333. 
Quorum,  125. 

Statutes,  333,  334. 

Relation  of,  to  Corporation  and  Stockholders,  120,  121. 
Removal,  35,   119. 

Code  Civ.  Pro.,  374. 
Resignation,  132. 
Special  Elections  of,  114,  115. 

Statutes,  307,  332,  333. 
Trustees  on  Dissolution,  56,  119,  120. 

Statutes,  334. 


404  GENERAL  INDEX. 

[References  are  to  pages.] 

Directors. — Continued. 

Vacancies,  117. 
Statutes,  307. 
Void  Acts, 

Statutes,  308. 
Voting,  126. 
Dissolution  of  Corporation,  51,  52-56,  96,  119,  120,  348. 

Statutes,    296,    320-323,    334;    Code    Civ. 

Pro.,  369-375,  377-38i. 
By  Action  of  Attorney  General,  53. 

Statutes,  369-375. 
By  Action  of  Incorporators, 

Statutes,  323. 
Directors  Are  Trustees,  56,  119,  120. 

Statutes,  334. 
Voluntary,  54-56,  272. 

Forms,  268-272. 

Statutes,  320-322;   Code   Civ. 

Pro.,  377-381. 
Fees,  348. 

Notice  of  Meeting,   105,   106. 
Rights    of    Dissenting    Stock- 
holders, 56. 
District  Steam  Companies, 

Statutes,  299,  300. 
Dividends,  88-90,  94,  124,  154,  155,  277. 

Statutes,  308. 
Declaration  of,  89,  277. 

Forms,  276,  277. 

Deducted  from.  Assessments,  154,  155. 
Payment  of,  89,  90. 
Stock,  89- 
Unauthorized,  88,  122,  124. 

Statutes,  308;  Pen.  Code,  384. 
Domestic  Corporations,  Definition, 

Statutes,  325;  Code  Civ.  Pro.,  381. 
Dummy  Directors  and  Incorporators,  25,  26. 
Duration  of  Corporation,  33,  51. 

Statutes,  295,  296,  328,  334,  335. 
Duties  of  Directors,  120,  121. 

Statutes,  333,  334,  336. 
Officers,  41,  127. 
Statutes,  309,  310. 


GENERAL  INDEX.  405 

[References  are  to  pages.] 
E. 

Election,  Annual  of  Directors,  40,  104,  105,  110-116.     (See  Meetings, 

Stockholders'   Annual.) 
Statutes,  307-309,  331-333- 
By-Laws  Fix  Time  and  Place,  103. 

Statutes,  307. 
Challenges,  109,  112,  113. 

Statutes,  331,  332. 
Contested,   113,   114. 

Statutes,  333. 
Cumulative  Voting,   no,   in. 

Statutes,  331. 
Effect  of  Neglect  to  Hold,  114. 

Statutes,  332. 

Inspectors  of,  109,  111-113,  211,  213. 
Forms,  211-213. 
Statutes,  309,  331-333- 
Misconduct  at, 

Pen.  Code,  385. 
Notice  of,  104,  210. 
Forms,  210,  211. 
Statutes,  307. 
Qualifications  of  Votes,  107. 

Statutes,  330,  331. 
Quorum,  106,  115. 

Statutes,  307. 
of  Officers,  47,  48,   127,   128. 

Statutes,  309. 
Power  of  Supreme  Court,  113. 

Statutes,  333. 
Special,  105,  114,  115. 

Statutes,  307,  332,  333. 
Electric  Light  Corporations,  186. 

Statutes,  338-343. 

Employed  Within  the  State.     (See  Capital  Stock.) 
Employees,  96,  97. 

Statutes,  317,  319,  320,  387;  Penal  Code,  382. 
Endorsement,  Corporate,  226. 

Forms,  227. 

Enforcement  of  By-Laws,  42. 
Evidence,  Documentary,  37,  135. 

Statutes,  327;  Code  Civ.  Pro.,  366,  367. 


406  GENERAL  INDEX. 

[References  are  to  pages.] 

Exchange  of  Stock  for  Property,  47,  49,  82,  83,  203-206. 

Forms,  203,  204. 
Statutes,  314. 
Preferred  for  Common  Stock,  76,  77. 

Statutes,  317. 
Execution  of  Charter,  35,  36,  179. 

Forms,  178,  183. 
Statutes,  294,  326. 
Contract,  226,  227. 
Forms,  226,  227. 
Executive  Committee,  49,  126.  [ation.) 

Law,  346. 

Exemption  of  Corporations  from  State  Taxation,  145,  146.     (See  Tax- 
Statutes,  353,  354,  359. 
Existence  of  Corporation,  33,  50-56,  70,  71. 

Statutes,  295,  296,  328,  334,  335. 
Dissolution,    51,    52-56,   96,    119,    120.     (See 

Dissolution.) 
Duration,  33,  51. 

Statutes,  295,  296,  328,  334,  335- 
Extension,  51,  52,  70,  71,  93. 

Statutes,  334,  335. 
Renewal,  51,  52,  70,  71,  93. 

Statutes,  334,  335. 
When  Commenced,  50. 

Statutes,  294. 
Expenses  of  Incorporation,  21-23,  36,  37.     (See  Fees  and  Taxation.) 

Statutes,  326,  346,  352. 
Tables,  23,  347,  348. 
Extension  of  Corporate  Existence,  51,  52,  70,  71,  93. 

Statutes,  334,  335. 

F. 

Face  Value.     (See  Par  Value.) 

Failure  to  Elect  Directors,  Effect  of,  114. 

Statutes,  332. 
False  Reports,  Penalty  for  Making,  122,  123,  124,  131. 

Statutes,  310,  311;  Pen.  Code,  85. 

Fees  and  Taxation,  21-23,  36,  37,  67,  138-159.     (See  Taxation.) 
Statutes,  326,  346,  349-362. 
Tables,  23,  347,  348. 
To  Comptroller,  347. 
To  County  Clerk,  22,  37,  67,  346-348. 
To  Secretary  of  State,  22,  23,  36,  67,  346-348. 


GENERAL  INDEX.  407 

[References  are  to  pages.] 

Ferries, 

Statutes,  338. 
Filing  and  Recording  Charter,  36,  37,  50. 

Statutes,  294,  295,  326. 
Fees,  21-23,  36,  37,  347- 

Statutes,  346-348. 
Finance  Committee,  49,  126. 
Financial  Statement  to  Stockholders,  95,  96. 

Statutes,  319. 
First  Meetings.     (See  Meetings.) 

of  Directors,  47-49,  202-206,  209. 

Forms,  202-204,  207-209. 
of  Stockholders,  44-47,  201-206. 

Forms,  201,  203-206. 
Foreign  Corporations,  164-172. 

Actions  by  and  against,  167,  168,  172. 
Statutes,  329;  Code  Civ.  Pro.,  368. 
Admission  to  State,  165,  166. 

Forms,  247-251. 
Statutes,  329,  330. 
Fees,  1 66,  167,  346,  348. 
Agent  of,  166,  168,  248,  249. 
Forms,  247-251. 
Statutes,  329,  330;  Code  Civ.  Pro.,  363;  Pen. 

Code,  383,  384. 
Attachment  against,  172. 

Code  Civ.  Pro.,  364-366. 

Authorization  to  do  Business  in  State,  165,  166. 
Books,  171. 

Statutes,  319. 

Certificate  of  Authority,  166. 
Forms,  247-249. 
Statutes,  329,  330. 
Definition, 

Statutes,  325;  Code  Civ.  Pro.,  381. 
Designation  of  Agent,  166,  168,  249. 
Forms,  247-250. 

Statutes,  329,  330;  Code  Civ.  Pro.,  363. 
Doing  Business  in  State,   Defined,   164,   165. 
Liabilities  of  Officers,  Directors,  etc., 

Statutes,  323. 
Penalties  for  Doing  Business  Without  License, 

167,  1 68. 
Statutes,  352,  353. 


408  GENERAL  INDEX. 

[References  are  to  pages.] 

Foreign  Corporations. — Continued. 

Power  to  Hold  Property  in  State,  167. 

Statutes,  330. 

Principal  Office  in  State,  166,  168. 
Forms,  247-251. 

Statutes,  329,  330;  Code  Civ.  Pro.,  363. 
Reports,  171,  172,  238,  239. 
Forms,  237,  238. 
Statutes,  310,  354,  355. 
Sale  of  Corporate  Property  to, 

Statutes,  311,  312. 
Security  for  Costs, 

Code  Civ.  Pro.,  381. 
Status,  164,  167. 
Taxation.     (See  Taxation.) 
Local,  170,  171. 
Statutes,  349. 
State,  168-170. 

License  Tax,  168,  169. 

Statutes,  352,  353. 
Privilege  Tax,  169,  170. 

Statutes,  353. 
Forfeiture  of  Corporate  Privileges,  52-54.     (See  Dissolution.) 

Statutes,  296,  334,  359;  Code  Civ. 

Pro.,  371. 
For  Misuser,  53. 
For  Non-user,  53. 
of  Stock  for  Unpaid  Subscriptions,  83,  84. 

Statutes,  314,  315. 
Formation  of  Corporation,  15,  16,  21-50. 

Forms,  I73-IQ9-  [347- 

Statutes,  294,  295,  326,  337-339,  343,  344, 
Fees,  21-23,  36,  37. 

Statutes,  326,  346,  352. 
Tables,  23,  347,  348. 

Franchise  Taxes,  22,  23,  138-146.     (See  Taxation.) 
Forms  for  Reports,  233-240. 
Statutes,  353-359- 
Table  of,  23. 
Fraud  in  Formation  of  Corporation, 

Penal  Code,  382,  383. 
in  Issue  of  Stock,  etc., 
Penal  Code,  383. 


GENERAL  INDEX.  409 

[References  are  to  pages.] 

Full  Liability  Corporations,  97. 

Statutes,  296. 
Full  Paid  Stock,  83,  96,  97. 

Statutes,  314. 

G. 

Gas  and  Electric  Light  Companies,  186. 

Statutes,  338-343- 
General  Corporation  Law,  Defined,  18. 

Statutes,  324-336. 
General  Manager,  127. 

Forms,  197. 
Good  Will,  Deducted  in  Assessment  for  Local  Taxation,  151,  157. 

Included  in  Assessment  for  Franchise  Tax,  141. 
Guaranteed  Stock.     (See  Preferred  Stock.) 
Guaranty  of  Bonds,  62,  64,  93. 

Statutes,  313,  314. 
Guardian;  Personal  Liability  as  Stockholder,  98. 

Statutes,  320. 

H. 

Holding  over  of  Officers  and  Directors,  114,  118,  132. 

Statutes,  332,  308. 
Holding  Stock  of  Other  Corporations,  61,  62,  155. 

Statutes,  313,  314. 

Status  of  Holding  Corporation,  61,  62. 
Its  Own  Stock,  60,  61. 
Statutes,  308. 

I. 

Incorporation,  15,  16,  24-50. 

Forms,  173-199. 

Statutes,  294,  295,  326,  337-339,  343,  344,  347- 
Certificate  of,  24-38.  (See  Certificate  of  Incorporation.) 

Statutes,  294,  295. 

Expenses  of,  21-23,  36,  37-     (See   Expenses  of  Incor- 
poration.) 
Incorporators,  24-26. 

Statutes,  294,  326. 
Acceptance  of  Subscriptions  of,  44. 


4IO  GENERAL  INDEX. 

[References  are  to  pages.] 

Incorporators. — Continued. 

Dissolution  by, 
Statutes,  323. 
Dummy,  25,  26. 
Frauds  by, 

Code  Civ.  Pro.,  382,  383. 
Number,  24,  25,  187. 

Statutes,  294,  337,  338,  343. 
Qualifications,  24. 

Statutes,  326. 

Increase  or  Decrease  of  Capital  Stock,  68,  69,  84,  85,  105,  261,  262,  264. 

Forms,  260-264. 
Statutes,  315,  316. 

of  Number  of  Directors,  69,  70,  116,  267. 
Forms,  265-268. 
Statutes,  307,  308. 
of  Number  of  Shares,  69,  77,  78. 

Statutes,  320. 
Indemnity  Bond,  Reissue  of  Lost  Certificate,  82. 

Forms,  221. 
Injunction, 

Code  Civ.  Pro.,  364,  370-374. 
Insolvency,  Transfers  in  Contemplation  of,  122. 

Statutes,  317. 
Inspection  of  Books,  95,  136,  137,  171. 

Statutes,  310,  319;  Penal  Code,  385. 
Inspectors  of  Election,  40,  109,  111-113,  211,  213. 

Forms,  211-213. 
Statutes,  309,  331-333- 
Appointment,  40,  ill. 
Certificate  of,  in,  112. 

Forms,  212,  213. 
Duties  of,  112. 
Oath  of,  in,  112,  211,  213. 

Forms,  212,  213. 

Oaths  Administered  by,  109,  113. 
Powers,  109-113. 
Reports,  109,  111-113,  211. 

Forms,  211-213. 
Instalments,  Subscription,  83,  84. 

Statutes,  314,  315. 

Issuance  of  Stock  for  Property.  (See  Exchange  of  Stock  for  Property.) 
Issue  of  Stock,  74,  82,  83. 

Statutes,  313,  314. 


GENERAL  INDEX.  411 

[References  are  to  pages.] 

J. 

Judicial  Supervision, 

Code  Civ.  Pro.,  368,  369. 


Laborers'  Rights  against  Individual  Stockholders,  96,  97. 

Statutes,  317,  319,  320,  387;  Penal  Code,  382. 
Laundry  Corporations,  Exemption  of,  145,  240. 

Forms,  239,  240. 
Statutes,  353,  354. 
Law,  Corporation,  15-20,  294-388. 

Business  Corporations,  294-301. 
Code  of  Civil  Procedure,  363-381. 
Executive,  346. 

General  Corporation,  324-336. 
Penal  Code,  382-386. 
Stock  Corporation,  302-323. 
Tax  Law,  349-362. 

Transportation  Corporations,  337-345. 
Laws,  Conflicting,  18. 

Statutes,  335,  336. 

Construction  of,  18. 

Statutes,  335,  336. 

Ledger,  Stock,  107,  109,  no,  112,  113,  134-136,  222,  223. 
Forms,  224. 

Statutes,  309,  310,  319,  330,  331. 
Legislature,  Power  to  Create  Corporations,  15,  16. 
Liabilities  of  Corporation  on  Reorganization, 

Statutes,  295,  304. 

Directors,  121-124.  [Penal  Code,  384. 

Statutes,    308-312,    317,    323,    334,    370,    371; 
False  Certificates,  122,  123,  124. 

Statutes,  310,  311. 
Foreign  Corporations, 

Statutes,  323. 
Loans  to  Stockholders,  124. 

Statutes,  308,  309;  Penal  Code,  384. 
Limitations  on, 
Statutes,  312. 
Negligence,  121,  122,  124. 


412  GENERAL  INDEX. 

[References  are  to  pages.] 

Liabilities  of  Corporation  on  Reorganization. — Continued. 
Directors. — Continued. 

Prohibited  Transfers,  122. 

Statutes,  317. 
Unauthorized  Dividends,  88,  122,  124. 

Statutes,  308;  Penal  Code,  384. 
Officers,  122-124,  130-132. 

Statutes,  296,  309,  312,  317,  323;  Penal  Code,  382-385. 
Stockholders,  96-98. 

Statutes,  296,  299,  314,  315,  319,  320,  323; 

Code  Civ.  Pro.,  370,  371. 
When  Stock  is  Full  Paid,  83,  96,  97. 
When  Stock  is  Part  Paid,  97,  98. 
License  Tax  on  Foreign  Corporations,  168,  169.     (See  Taxation.) 

Statutes,  352,  353. 
Limitation  of  Corporate  Powers,  30,  34,  57. 

Statutes,  327,  328,  330. 
Directors'  and  Officers'  Liabilities, 

Statutes,  312. 
Stockholders'  Liability,  96-98. 

Statutes,  320. 
Lists,  Subscription,  34,  78-81. 

Forms,  173-176. 
Statutes,  314. 
Loans  to  Stockholders,  124. 

Statutes,  308,  309;  Pen.  Code,  384. 
Local  Tax,  150-159,  162,  163,  240,  241,  243,  244.     (See  Taxation;  also 

Reports.) 
Forms,  241-246. 
Statutes,  349-351- 

Location  of  Principal  Office,  33,  103,  134,  151,  163. 

Statutes,  294,  295. 
Change  of,  70,  257,  347. 
Forms,  255-257. 
Statutes,  322,  323. 
of  Foreign  Corporation,  166,  168. 
Forms,  247-251. 

Statutes,  329,  330;  Code  Civ.  Pro.,  363. 
Lost  Certificates  of  Stock,  82,  91,  94. 

Statutes,  318. 
Indemnity   Bond,  82. 

Forms,  221. 
Lost  Certificate  of  Incorporation, 

Statutes,  327. 


GENERAL  INDEX.  413 

[References  are  to  pages.] 
M. 

Majority,  Powers  of.     (See  Stockholders.) 
Manufacturing  Companies,  145,  146. 

Exempt  from  Franchise  Tax,  145,  146,  240. 
Forms,  239,  240. 
Statutes,  353,  354. 
Meetings,  40-49,  102-115,  124-126. 

Forms,  200-217. 
Adjournment,  47,  49,  55. 
Calls,  68,  103,  213,  215. 

Forms,  201,  202,  213,  215. 
Calls  and  Waivers,  45,  48,  104. 
Forms,  201,  202. 
Statutes,  336. 
Consent,  45,  48,  68,  104,  125. 

Statutes,  336. 
Directors',  40,  47-49,  124-126. 

Forms,  202-204,  207-209,  214,  215. 
Statutes,  295.  / 

First,  47-49,  202-204,  209. 

Forms,  202-204,  207-209. 
Adjournment,  49. 
Call  and  Waiver,  48,  202. 

Forms,  202. 

Election  of  Officers,  48,  49. 
Exchange  of  Stock  for  Property,  49,  82,  83. 

Forms,  203,  204. 
Minutes,  48,  203,  209. 

Forms,  207-209. 
Place  of,  125. 
Regular,  124-126. 

Forms,  214. 
Special,   125. 

Forms,  215. 
Minutes  of,  45,  48,  203,  209. 

Forms,  205-209. 

Notice  of,  44,  45,  48,  68,  94,  103-106,  125,  210. 
Forms,  210,  211,  214-215. 
Statutes,  307,  336. 
Officers  of,  48. 

Order  of  Business,  188,  189,  193,  195. 
Proxies,  108,  109,  126,  200,  201,  216,  217. 
Forms,  200,  216,  217. 
Statutes,  331,  332. 


414  GENERAL  INDEX. 

[References  are  to  pages.] 

Meetings. — Continued. 

Quorum,  40,  46,  106,  107,  115,  125. 

Statutes,  307,  328,  333,  334. 
Record  of.     (See  Minutes.) 
Stockholders',  40,  44-47,  102-115. 

Statutes,  307,  330-333.  [Election.) 

Annual,  102-115.     (See  Annual  Meeting;  also 
Forms,  210-213. 
Statutes,  307. 
First,  44-47. 

Forms,  200-206. 
Acceptance  of  Charter,  46. 
Adjournment,  47,  55. 
Adoption  of  By-Laws,  41,  42,  46,  47. 
Calling  Meeting,  44,  45. 

Forms,  201. 

Conduct  of  Meeting,  46. 
Exchange    of    Stock   for    Property,    47, 

82,  83,  203-206. 
Forms,  203,  204. 
Minutes,  45,  203. 

Forms,  205,  206. 
Notice,  44,  45. 

Statutes,  336. 
Organization,  46. 
Place  of,  102,  103. 
Special,  103-106,  114,  115. 
Forms,  213,  214. 
Statutes,  336. 
Voting  at,  94,  107-113,  115,  126.     (See  Voting.) 

Statutes,  331-333- 
Waivers  of  Notice,  48,  104. 
Forms,  201,  202. 
Statutes,  336. 
Merger,  67. 

Statutes,  322. 
Fees,  348. 
Mining  Companies,  Exemption  of,  145,  240. 

Forms,  239,  240. 
Statutes,  353,  354. 
Minority.     (See  Protection  of.) 
Minutes,  45,  48,  203,  209. 
Book  of,  209. 
Certified,  229. 
Forms,  228,  229. 


GENERAL  INDEX.  415 

[References  are  to  pages.] 

Minutes. — Continued. 

Directors'  First,  48,  203,  209. 

Forms,  207-209. 
Stockholders'  First,  45,  203. 

Forms,  205,  206. 
Misconduct  of  Directors,  Officers  and  Employees, 

Penal  Code,  384,  385. 
at  Elections, 

Penal  Code,  385. 
Misuser,  Forfeiture  for,  53. 

Code  Civ.  Pro.,  371. 
Monopolies, 

Statutes,  305,  388. 

Mortgages,  62-64,  93-     (See  Bond  Issues.) 
Statutes,  302,  303,  305,  306. 
Exempt  from  Local  Taxation,  151,  157. 
Foreclosure, 

Statutes,  305;  Code  Civ.  Pro.,  374. 
Recorded,  Evidence  of  Stockholders'  Consent, 
Statutes,  305,  306. 

N. 

Name,  Corporate,  28,  29,  71,  72,  178. 

Statutes,  294,  326,  327;  Code  Civ.  Pro.,  375-377- 
Change  of,  29,  71,  72,  253,  254. 
Forms,  251-254. 
Code  Civ.  Pro.,  375-377- 
Fees,  253,  254,  347. 
Unlawful  Use  of, 

Penal  Code,  384. 
Navigation  Companies,  186,  187. 

Statutes,  337,  338. 
New  York  City,  Local  Taxation,  157,  158,  163,  240,  243,  244,  279,  280. 

Form  of  Tax  Report,  242,  243. 
Non-user,  Forfeiture  for,  53. 

Statutes,  334. 
Non- Voting  Stock,  76,  77. 

Statutes,  330. 
Notice  of  Directors'  Meetings,  48,  125. 

Forms,  214,  215. 
of  Dividends,  277. 
Forms,  277. 


41 6  GENERAL  INDEX. 

[References  are  to  pages.] 

Notice  of  Directors'  Meetings. — Continued. 

of  Stockholders'  Meetings,  44,  45,  94,  103-106,  210. 
Forms,  210,  211,  214. 
Statutes,  307. 
Waiver  of,  48,  104. 
Forms,  201,  202. 
Statutes,  336. 
Number  of  Directors,  33,  34,  40,  116,  186,  187. 

Statutes,  295,  337,  339,  344. 
Change  of,  69,  70,  116,  267. 
Forms,  265-268. 
Statutes,  307,  308. 
Incorporators,  24,  25,  187. 

Statutes,  294,  337,  338,  343. 
Shares,  Change  of,  69,  77,  78. 
Statutes,  320. 

O. 

Oath  of  Challenged  Stockholder  or  Proxy,  109,  113. 

Statutes,  332. 
of  Inspectors  of  Election,  in,  112,  211,  213.     (See  Inspectors  of 

Election.) 
Forms,  212,  213. 
Statutes,  309. 
Oaths  and  Affirmations, 

Code  Civ.  Pro.,  366. 

Office,  Principal,  33,  70,  103,  134,  151,  163,  166,  168,  257,  347. 
Change  of  Location,  70,  257,  347. 
Forms,  255-257. 
Statutes,  322,  323. 
Location  of,  33,  103,  134,  151,  163. 

Statutes,  294,  295. 
of  Foreign  Corporation,  166,  168. 
Forms,  247-251. 

Statutes,  329,  330;  Code  Civ.  Pro.,  363. 
Officers,  41,  47,  48,  58,  122-124,  127-133.  (See  By-Laws,  189,  100,  193-197.) 

Statutes,  309,  328. 
Appointment  of,  58,  127. 

Statutes,  309,  328. 
Bond  of,  128. 
Forms,  277,  278. 
Statutes,  309. 
Compensation,  133. 


GENERAL  INDEX.  417 

[References  are  to  pages.] 

Officers. — Continued. 

Duties,  41,  127. 

Statutes,  309,  310. 
Election  of,  48,  127. 

Statutes,  309. 
Essential,  127. 
Liabilities  of,  122-124,  130-132. 

Statutes,  296,  309,  312,  317,  323;  Penal  Code,  382-385. 
Powers,  128-130. 

Statutes,  309. 

President.     (See  President.) 
Qualifications,  127,  128. 

Statutes,  309. 
Removal,  132. 

Statutes,  309;  Code  Civ.  Pro.,  368,  374. 
Resignation,  132. 
Salaries,  133. 

Secretary.     (See  Secretary.) 
Signatures,  131,  225,  226. 

Forms,  225-227. 
Tenure  of  Office,  132. 

Statutes,  309. 

Treasurer.     (See  Treasurer.) 
Vacancies,  127.     (See  By-Laws,  189,  195.) 
Vice-President,  127,  128,  189,  193-196. 
Order  of  Business.     (See  By-Laws,  188,  189,  193,  195.) 
Organization  of  Corporation,  21-50.    (See  Certificate  of  Incorporation.) 

Forms,  173-199. 

Statutes,  294,  295,  326,  337-339,  343,  344- 
Fees  and  Expenses  of,  21-23,  346,  347,  348. 
First  Meetings,  44-49. 
Frauds  in  Organization, 

Penal  Code,  382,  383. 
Tax,  21-23,  36,  37,  347. 

Statutes,  352. 
Table  of,  23. 

P. 

Paid  Up  Stock,  83,  96,  97. 

Statutes,  314. 

Parties  to  Charter,  24-26.     (See  Incorporators.) 
Partly  Paid  Stock,  Certificate  of,  82. 

Statutes,  323. 


4l8  GENERAL  INDEX. 

[References  are  to  pages.] 

Par  Value  of  Stock,  32,  77,  78. 

Statutes,  294. 
Issue  for  Less  than,  83. 

Statutes,  323. 
Patents  and  Copyrights,  Deducted  in  Assessment  for  Local  Taxation, 

151,  156. 
Included   in  Assessment  for  Franchise  Tax, 

140. 

Payment  for  Stock  in  Property.     (See  Exchange  of  Stock  for  Prop'y-) 
Payment  of  Capital  Stock,  73,  74,  83,  84,  230,  348. 

Forms,  231. 

Statutes,  295,  296,  314,  338. 
Payment  of  Tax  and  Penalty  for  Failure.     (See  Taxation.) 

Statutes,  356-359. 
Penal  Code,  382-386. 
Personalty,  Taxation  of,  150-158.     (See  Taxation.) 

Statutes,  349-351- 
Place  of  Assessment  of  Personalty,  151. 

Statutes,  349,  350. 

Place  of  Business,  33,  70,  103,  134,  151,  163,  166,  168,  257,  347.     (See 

Office,  Principal.) 

Statutes,  294,  295,  322,  323,  329,  330;  Code  Civ. 

Pro.,  363. 
Pleadings, 

Code  Civ.  Pro.,  364. 
Pledgee  of  Stock,  Liability,  98,  107. 

Statutes,  320. 
Pledgor  of  Stock,  Liabilities,  98,  107. 

Statutes,  320. 
Right  to  Vote,  107. 

Statutes,  331. 
Powers  of  Corporations,  30,  31,  34,  35,  57-72.     (See  Amendment  of 

Charter.) 

Statutes,  311,  328. 
Banking  Powers  Prohibited,  30. 

Statutes,  330. 
Limitations  on,  30,  34,  57. 

Statutes,  327,  328,  330. 
To  Acquire  Property  Outside  State,  59,  60; 

Statutes,  328,  329. 
Amend    Charter,    67-72;    Statutes,    326, 

327- 

Appoint  Directors,  Officers  and  Agents, 
58,  127;  Statutes,  309,  328. 


GENERAL  INDEX.  419 

[References  are  to  pages.] 

Powers  of  Corporations. — Continued. 

To  Borrow    Money,    62-64;    Statutes,    302, 

303,  314. 
Buy,    Sell    and    Hold    Property,   59-62; 

Statutes,  328. 

Condemn  Land,  Statutes,  300,  301. 
Consolidate,  65-67,  93;  Statutes,  296-299, 

326,  352. 

Dissolve,  54-56;  Statutes,  320-322. 
Do  Business  in  Other  States,  64;  Stat- 
utes, 328,  329. 
Exchange       Preferred      for      Common 

Stock,  76,  77;  Statutes,  317. 
Extend    Existence,    51,    52,    70,    71,    93; 

Statutes,  334,  335. 
Guarantee   Bonds,  62,  64,  93;   Statutes, 

313,  314. 

Have  a  Seal,  58,  59;  Statutes,  328. 
Have  Succession,  57;  Statutes,  328. 
Hold  Its  Own  Stock,  60,  61;  Statutes,' 
308. 

Other  Stock,  61,  62,  155;  Statutes, 

313,  3i4- 
Issue   Bonds,  62-64;   Statutes,  302,  303. 

(See  Bond  Issues.) 
Issue   Partly  Paid  Stock,  82;   Statutes, 

323. 

Issue  Preferred  Stock,  70,  74-77;  Stat- 
utes, 316,  317. 
Make    By- Laws,   41,   58;    Statutes,   328. 

(See  By-Laws.) 
Merge,  67;  Statutes,  322. 
Mortgage     Property,     62-64;     Statutes, 

302,  303,  305,  306. 
Sell     Entire    Property    and    Franchise, 

93;  Statutes,  311,  312. 
Sue  and  Be  Sued,  16. 
Ultra  Vires  Acts,  Effect  of,  30,  72. 
Powers  of  Directors,  100,  118-120. 

Statutes,  295,  309,  328,  333,  334. 
Officers,  128-130. 

Statutes,  309. 

Stockholders,  92-96,  99,   100. 
Powers  of  Supreme  Court  Respecting  Elections,  113,  114. 

Statutes,  333. 


42O  GENERAL  INDEX. 

[References  are  to  pages.] 

Preferred  and  Deferred  Causes, 

Code  Civ.  Pro.,  366. 
Preferred  Claims,  Laborer's  Wages, 

Statutes,  317. 
Preferred  Stock,  31,  32,  70,  74-77. 

Statutes,  294,  316,  317. 
Certificate  of,  81,  220. 

Forms,  219. 

Creation  after  Organization,  31,  32,  70,  76. 
Forms,  258-261,  262-264. 
Statutes,  316,  317. 
Redemption  of,  76,  77. 

Statutes,  317. 

Rights  of  Holders  of,  75,  76. 
Voting  Rights,  75,  76. 
President,  127-129.     (See  By-Laws,  189,  195,  196.) 

Statutes,  309. 
Call  for  Special  Meeting,  213. 

Forms,  215. 
Qualifications,  127,  128. 

Statutes,  309. 
Signature,  131. 

Forms,  225-227. 
Principal  Office,  33,  70,   103,   134,   151,   163,   166,   168,  257,  347. 

Forms,  247-251,  255-257.  [363. 

Statutes,  294,  295,  322,  323,  329,  330;  Code  Civ.  Pro., 
Property  for  Stock.     (See  Exchange  of  Stock  for  Property.) 
Power  to  Hold,  59-61. 
Sale  of  Entire,  93. 
Forms,  203,  204. 
Statutes,  311,  312. 
Protection  of  Minority. 

Classification  of  Stock,  70,  74-78. 

Statutes,  294,  316,  317. 
Cumulative  Voting,  no,  in. 

Statutes,  331. 

Voting  Trusts,  100,  101,  274. 
Forms,  273,  274. 
Statutes,  331. 

Proxies,  107-109,  126,  201,  202,  217. 
Forms,  200,  216,  217. 
Statutes,  331,  332. 
Expiration  of,  108. 
Oath  of,  109. 


GENERAL  INDEX.  421 

[References  are  to  pages.] 

Proxies. — Continued. 

Revocation  of,  108. 

Forms,  217. 

Publication  of  Notice,  104-106,  210. 
Forms,  211. 
Statutes,  307,  336. 
Purposes,  Charter,  30,  31.     (See  Certificate  of  Incorporation.) 

Statutes,  294. 
Additional,  68. 
Statutes,  311. 

Q. 

Qualifications  of  Directors,  34,  40,  117. 

Statutes,  307,  333. 
Incorporators,  24. 

Statutes,  326. 
Officers,  127,  128. 

Statutes,  309. 
Voters  at  Corporate  Meetings,  107. 

Statutes,  330-333- 
Quorum  at  Annual  Meeting,  40,  106,  no. 

Statutes,  307. 
Directors'  Meetings,  40,  125. 

Statutes,  333,  334. 

Stockholders'  Meetings,  40,  46,  106,  107,  no,  115. 
Statutes,  307,  328,  333. 

R. 

Ratification  of  Unauthorized  Action,  125. 
Real  Estate,  141,  150,  153,  154. 

Deducted  in  Assessment  for  Local  Taxation,  150,  153,  154. 
Receivers, 

Statutes,  305;  Code  Civ.  Pro.,  369-375. 
Recorded  Mortgage  Evidence  of  Stockholders'  Consent, 

Statutes,  305,  306. 
Recording  Certificate  of  Incorporation,  36,  37,  50. 

Statutes,  294,  295,  326. 
Fees,  22,  23,  36,  37,  347. 

Statutes,  346-348. 
Redemption  of  Preferred  Stock,  76,  77. 

Statutes,  316,  317. 


422  GENERAL  INDEX. 

[References  are  to  page*.] 

Reduction  of  Capital  Stock,  69,  84,  85,  105,  262,  347. 

Forms.     (See  Increase  of  Stock.) 
Statutes,  315,  316. 
Reduction  of  Number  of  Directors,  69,  70,  116,  267. 

Forms,  265-268. 
Statutes,  307,  308. 
Shares,  60.  77,  78. 

Statutes,  320. 

Regular  Meetings.     (See  Meetings.) 
Relations  of  Stockholders,  98,  99. 
Removal  of  Directors,  35,  119. 

Code  Civ.  Pro.,  374. 
Officers,  132. 

Statutes,  309;  Code  Civ.  Pro.,  368,  374. 
Renewal  of  Corporate  Existence,  51,  52,  70,  71,  93. 

Statutes,  334,  335. 
Reorganization  of  Existing  Corporation,  21,  22,  65-67. 

Statutes,  295,  296,  297,  326. 
Agreement  for, 

Statutes,  304,  305. 
Upon  Sale  of  Corporate  Prop- 
erty and  Franchises, 
Statutes,  303-305,  326- 
Repeal  of  By- Laws,  43. 
Reports, 

'    Annual,  160,  161,  232,  233. 
Forms,  232,  233. 
Statutes,  310. 

Comptroller's.     (See  Reports,  Tax.) 

Franchise  Tax.     (See  Reports,  Tax,  to  State  Comptroller.) 
Foreign  Corporations',  171,  172,  238,  239. 
Forms,  237,  238. 
Statutes,  310,  354,  355. 
Inspectors  of  Election,  in,  112,  211. 
Forms,  212-213. 
Statutes.  309,  333. 
Liability  for  False  Report,  122-124,  131. 

Statutes,  310,  311;  Penal  Code,  385. 
Stock  Exchanged  for  Property  must  be  so  reported, 

Statutes,  314. 

Tax,  to  Local  Assessors,  162,  163,  171,  172,  240,  241,  243,  244. 

Forms,  241-246. 
Statutes,  350,  351. 
New  York  City,  158,  240,  243,  244. 
Forms,  242,  243. 


GENERAL   INDEX.  423 

[References  are  to  pages.] 

Reports.  —  Continued. 

Tax,  to  Local  Assessors.  —  Continued. 

Rochester,  241. 

Forms,  244,  245. 
Syracuse,  241. 

Forms,  245,  246. 

to  State  Comptroller,  161,  162,  171.  172,  235-239. 
Forms,  233-240. 
Statutes,  354-357- 
Domestic  Corporations,  161,  162. 
Forms,  233,  234,  236,  239,  240, 
Execution  of,  135. 
Foreign    Corporations,    171,    172, 


Forms,  237.  238. 
Manufacturing  Corporations,  145. 

240, 

Forms,  239,  240. 
Penalty  for  Failure  to  Make,  162. 

Statutes,  357. 
Supplemental  Reports,  162. 

Statutes,  355. 
When  Filed,  335. 
Resolutions,  203.  230. 

Forms,  204,  276, 
Certified,  230. 

Forms,  220,  230. 
Restrictions  upon  Commencement  of  Business,  50,  51. 

Statutes,  295,  326. 
Voting,  35,  77,  108. 
Statutes,  330,  331. 
Revocation  of  Proxy,  108. 

Forms,  217. 

Rights  of  Stockholders,  56,  66,  67,  82,  91-96,  107-109. 
Collective,  91  -93- 
Individual.  93-96, 
To  Vote,  94,  107-109. 
Statutes,  330-333- 


Salaries  of  Directors,  1 18,  133, 

Officers,  133. 
Sale  of  Franchise  and  Property,  93. 

Statutes,  311,  312. 


424  GENERAL  INDEX. 

[References  are  to  pages.] 

Seal,  58,  59- 

Statutes,  313,  328. 
Attestation  of,  226. 

Forms,  226. 

Secretary,  127.     (See  By-Laws,  190,  196,  197.) 
Books  of,  134-137,  222,  223. 
Certificate  of,  228,  229. 

Forms,  199,  228-230,  271,  272. 
Duties,  41,  59,  213,  215. 

Statutes,  310,  313,  295,  296. 
Affixing  Seal,  58. 
Attestation  of  Seal,  226. 
Closing  Stock  Books,  109,  no. 
Transfer  of  Stock,  86-88,  220-222. 
Signature,  131,  226. 

Forms,  226,  229,  230. 
Service  on  Corporations, 

Code  Civ.  Pro.,  363,  364,  381. 
Shares  of  Stock,  32,  69,  77,  78.     (See  Stock.) 

Increase  or  Decrease  of  Number,  69,  77,  78. 

Statutes,  320. 
Par  Value,  32,  77,  78. 

Statutes,  294. 
Signatures,  Corporate  and  Official,  131,  225,  226. 

Forms,  225-227. 
to  Stock  Certificates,  81. 

Forms,  218,  219. 

Sources  of  Corporation  Law,  15. 

Special  Meetings,  103-106,  114,  115,  125.     (See  Meetings.) 
Forms,  213-215. 
Statutes,  336. 

Statute  Requirements  for  Calling,  103-106. 
to  Elect  Directors,  105,  114,   115. 

Statutes,  332,  333. 
Special  Provisions  in  Charter,  34,  35. 

Statutes,  327,  328. 
Classification  of  Stock,  74-78. 

Statutes,  294,  316,  317. 
Corporate  Stockholding,  60-62,  155. 

Statutes,  313,  314. 
Cumulative  Voting,  no,  in. 

Statutes,  331. 

Standing  Committees,  49,  126. 
Statement  of  Financial  Condition,  95,  96. 

Statutes,  319. 


GENERAL  INDEX.  425 

[References  are  to  pages.] 

State  Tax,  138-149.     (See  Taxation.) 
Forms,  233-240. 
Statutes,  351-362. 
Statutes,  16-20,  294-388. 

Business  Corporations  Law,  17,  294-301. 
Classification  of,  16-20. 

Code  of  Civil  Procedure,  363-381.  , 

Executive  Law,  346. 
General  Corporation  Law,  18,  324-336. 
Penal  Code,  382-386. 

Stock  Corporation  Law,  17,  18,  302-323. 
Tax  Law,  349-362. 

Transportation  Corporations  Law,  18,   19,  186,  337-345. 
Stay  in  Action  Collusively  Brought, 

Statutes,  333. 
Steam  Corporations, 

Statutes,  299,  300. 

Stock.    (See  Separate  Subjects  for  Detailed  and  Statutory  References.) 
Assignment  of,  86-88,  94,  .95,  220-222. 

Forms,  220,  222. 
In  Blank,  86,  87,  220. 

Forms,  220. 

Book,  107-110,  112,  113,  115,  134-136,  222,  223.     (See  Books,  Cor- 
porate.) 
Forms,  224. 

of  Foreign  Corporation,  171. 
Capital,  31,  32,  41,  73-90.     (See  Capital  Stock.) 
Certificates  of,  81,  82,  94. 

Forms,  218,  219. 
Classification  of,  31,  70,  74-78. 

Forms,  258-260,  262-264. 
Common,  74,  75. 

Forms,  218. 

Consideration  for  Issue,  82,  83. 
Decrease  of,  69,  84,  85,  105,  262. 

Forms.     (See  Increase  of  Stock.) 
Dividends,  88-90,  94,  124,  154,  155,  277. 

Forms,  276,  277. 
Exchange  for  Property,  47,  49,  82,  83,  203-206. 

Forms,  203,  204. 
Forfeiture  of,  83,  84. 
Full  Paid,  83,  96,  97. 

Increase  of,  68,  69,  84,  85,  105,  261,  262,  264. 
Forms,  260-264. 


426  GENERAL  INDEX. 

[References  are  to  pages.] 

Stock. — Continued. 

Issue  of,  74,  82,  83.     (See  Exchange  of  Stock  for  Property.) 
Ledger,  107-110,  112,  113,  115,  134-136,  222,  223. 

Forms,  224. 

Minimum  Amount,  31,  32,  74. 
Non-Voting,  76,  77. 
Partly  Paid,  82. 
Par  Value,  77,  78. 
Payment  of,  73,  74,  83,  84,  230,  348. 

Forms,  231. 

Power  to  Hold,  60-62,  155. 
Preferred,  31,  32,  70,  74-77,  81,  220. 

Forms,  219. 

Shares  of,  36,  69,  77,  78. 
Subscription  to,  34,  78-81,  1/6. 

Forms,  173-176. 
Transfer  of,  86-88,  94,  95,  220-222. 

Forms,  220,  222. 

Transfer  Tax,  146-149.     (See  Taxation.) 
Unissued,  74. 

Stock  Books.     (See  Books,  Corporate.) 
Stock  Corporation  Law,  Defined,  17,  18. 

Statutes,  302-323. 
Stockholders,   91-101. 

Actions  by  or  against,  91-99,  122. 

Statutes,  319,  320;  Code  Civ.  Pro.,  370,  371,  374,  375. 
Consent  of,  102.     (See  Consent  of  Stockholders.) 
1          Creation  of  Relation,  91. 
Liabilities  of,  83,  96-98. 

Statutes,    296,    299,    314,    315,    319,    320, 

323;  Code  Civ.  Pro.,  370,  371. 
When  Stock  is  Full-paid,  96,  97. 
When  Stock  is  Part-paid,  97,  98. 
List  of,  to  be  kept,  135. 

Statutes,  309,  310. 
Loans  to,  Prohibited,  124. 

Statutes,  308,  309;  Pen.  Code,  384. 
Majority,  Powers  of,  99,  100. 
Meetings  of,  40-47,  102-115.     (See  Meetings.) 

Statutes,  307,  330-333- 
First,  44-47. 

Forms,  200-206. 
of  Record,  107,  108. 
Statutes,  330,  331. 


GENERAL  INDEX.  427 

[References  are  to  pages.] 

Stockholders. — Continued. 

Relations  of,  98,  99. 

Rights,  56,  66,  67,  82,  91-96,   107-109.     (See   Rights  of 

Stockholders.) 
Transfers  of  Property  to,  122. 

Statutes,  317. 
Stock  Transfer  Tax,  146-149.     (See  Taxation.) 

Statutes,   360-362. 
Subscriptions  to  Stock,  34,  78-81,  176. 

Forms,  173-176. 
Statutes,  314,  315. 
Acceptance  of,  44,  78,  79,  80. 
After  Incorporation,  79-81. 
Forfeiture  of  Stock  for  Non-Payment,  83,  84. 
Payment  of,  80,  81,  83,  84. 
Ten  Per  Cent.  Must  Accompany,  80,  176. 

Statutes,  314. 
Subscribers  to  Certificate,  34-36. 

Statutes,  294,  295. 
Summons,  How  Served, 

Code  Civ.  Pro.,  363,  364,  381. 
Surplus,  When  Exempt  from  Taxation,  150,  155. 

T. 

Table  of  Fees,  23,  346,  347,  348. 
Taxation,  21-23,  138-159,  161-163,  235-244. 
Forms,  233-246. 
Statutes,  349-362. 

Annual  Franchise  Tax,  22,  23,  138-146,  235-240. 
Forms,  233-240. 
Statutes,  353-359- 
Basis  for,  139,  140. 
Capital   Employed  in  State,  139-142, 

169,  170. 
Statutes,  353. 
Classification  for,  142-145. 

Statutes,  353. 
Comptroller's  Powers,  162. 

Statutes,  357,  358. 
Deductions,   140. 
Exempt  Corporations,  145,  146. 
Statutes,  353,  354,  359- 


428  GENERAL  INDEX. 

[References  are  to  pages.] 

Taxation. — Continued. 

Annual  Franchise  Tax. — Continued. 

Foreign  Corporations   169,  170. 

Statutes,  353. 

Good  Will,  Value  Included,  141. 
Manufacturing  Companies,   145,  146, 

235,  240. 
Forms,  239,  240. 
Statutes,  353,  354. 

Patents   and    Copyrights,   Value   In- 
cluded, 140. 
Payment  of,  279. 

Statutes,  356,  357. 
Penalties  for  Non-Payment, 

Statutes,  356-359- 
Personal     Property,     Exempt    from 

Other  State  Taxation, 
Statutes,  359. 

Reports,  161,  162,  235-240.     (See  Re- 
ports.) 

Forms,  233-240. 
Table  of,  23. 

United  States  Bonds,  Value  Includ- 
ed, 140. 
When  Dividends  are  Less  Than  6%, 

143,  144- 
When  Dividends  are  Not  Less  Than 

6%,  142,  143. 
When   No  Dividends  are   Paid,   144, 

145- 
License  Tax,  Foreign  Corporations,  168,  169. 

Statutes,  352,  353. 

Local  Tax,  150-159,  162,  163,  170,  171,  240,  241,  243,  244. 
Forms,  241-246. 
Statutes,  349-351- 
Assessment,  151-158,  240,  241. 

Statutes,  350,  351. 
Date  of,  157,  163. 
In  New  York  City,  157,  158,  240,  243, 

244. 

Manner  of,  152. 
Place  of,  134,  151. 

Statutes,  349,  350. 
Deductions,  150-157. 
Statutes,  350,  351. 


GENERAL  INDEX.  429 

[References  are  to  pages.] 

Taxation. — Continued. 

Local  Tax. — Continued. 

Foreign  Corporations,  170,  171. 

Statutes,  349. 
On  Personalty,  150-158. 

Realty,  150,  153,  154. 
Reports,  162,  163.     (See  Reports.) 
Forms,  241-246. 
Statutes,  350,  351. 
Special  Franchises,  159. 
Stockholders  Not  Taxed  on  Stock, 

Statutes,  349. 
Tax  District,  150. 
Organization  Tax,  21,  22,  36,  37,  347. 

Statutes,  352. 
Table  of,  23. 
Privilege  Tax,  Foreign  Corporations,  169-170. 

Statutes,  353. 
Stock  Transfer  Tax,  146-149. 

Statutes,  360-362. 
Comptroller's  Rules,  147-149. 
Tax  District,  150.     (See  Taxation.) 
Tax  Law,  19. 

Statutes,  349-362. 
Telegraph  and  Telephone  Corporations,  187. 

Statutes,  343-345- 
Transcript,  Certified,  from  By-Laws,  230. 

from  Minutes,  228-230. 

Forms,  228-230. 
Resolution,  230. 

Forms,  229,  230. 
Transfer  Agent,  no. 

of  Foreign  Corporation,  171. 

Statutes,  319. 
Transfer  Book,  222. 

Forms,  222. 
Closing,  107,  109,  no. 

Statutes,  330,  331. 

Transfer  of  Stock,  86-88,  94,  95,  220-222. 
Forms,  220,  222. 
Statutes,  309,  310,  313,  314. 
In  Blank,  86,  87,  220. 

Forms,  220. 
Tax  on,  146-149. 
Statutes,  360-362. 


430  GENERAL   INDEX. 

[References  are  to  pages.] 

Transfer  Tax  Law,  146-149.     (See  Taxation.) 

Statutes,  360-362. 
Transfers  in  Contemplation  of  Insolvency,  122. 

Statutes,  317. 
Transportation  Corporations  Law,  18,  19,  186,  187. 

Statutes,  337-345- 

Treasurer,  127,  128.     (See  By-Laws,  190,  193,  197.) 
Affidavit,  228. 
Forms,  228. 
Bond  of,  128. 

Forms,  277,  278. 
Duties,  41,  95. 
Endorsement  of,  227. 

Forms,  227. 
Signature,  131. 

Forms,  227. 
Statement  of,  95,  96. 

Statutes,  319. 

Treasury  Stock.     (See  By-Laws,  188,  192.) 
Trustee,  Not  Personally  Liable,  98. 

Statutes,  320. 
Trustees,  Directors,  on  Dissolution,  56,  119,  120. 

Statutes,  334. 
Trusts,  Voting,  100,  101,  274. 

Forms,  273,  274. 
Statutes,  331. 

U. 

Ultra  Vires,  30,  72. 

Statutes,  327,  328. 
Underwriting  Agreement, 

Forms,  274-276. 
Unissued  Stock,  74. 

United  States  Securities,  Excluded  From  Local  Tax,  151,  156. 
Included  in  Franchise  Tax,  140. 

v. 

Vacancies,  Directors,  117.     (See  By-Laws,  189,  194.) 

Statutes,  307. 

Officers,  127.     (See  By-Laws,  189,  195.) 
Verification  of  Pleadings, 

Statutes,  364. 


GENERAL  INDEX.  431 

[References  are  to  pages.] 

Vice-President,  127,  128.     (See  By-Laws,  189,  193-196.) 

Voluntary  Dissolution,  54-56,  272.     (See  Dissolution.) 

Voting,  35,  76,  77,  92-94,  100,  107-113,  115,  126.     (See  Election.) 

Statutes,  330-333- 
Challenges,  109,  112,  113.  • 

Statutes,  331,  332. 
Cumulative,  no,  in. 

Statutes,  331. 
Identification  for,  107-109,  112,  113,  115. 

Statutes,  330,  331,  333. 
Oath,  when  Challenged,  113. 

Statutes,  332. 
Preferred  Stock,  76. 
Proxies,  107-109,  126,  200,  201,  217. 
Forms,  200,  216,  217. 
Statutes,  331,  332. 
Restrictions  on,  35,  77,  108. 

Statutes,  330,  331. 
Right  to  Vote,  77,  94,  107-109. 

Books,  Evidence  of,  107,  108,  112,  113,  115. 

Statutes,  330,  331,  333. 
Voting  Trusts,  100,  101,  274. 

Forms,  273,  274. 
Statutes,  331. 

W. 

Wages  and  Laborers,  96,  97. 

Statutes,  317,  319,  320,  387;  Pen.  Code,  382. 
Waiver  of  Notice,  45,  48,  104. 

Forms,  201.  202. 
Statutes,  336. 
Water  Works  Corporations, 

Statutes,  300. 


